Lee’s Demolition Thrives with Craft3 Commercial Loan

The Seattle-Tacoma region has experienced a construction boom for many years. More people, more traffic, more road development and maintenance, more cranes and equipment everywhere. So-called slow years are still busy, and “busy years” are, well, just crazy. With all the construction, you’d think that it would be easy for a new general contracting business.

Not so, says Chris Ramos, owner of Lee’s Demolition, a road restoration and demolition firm headquartered in Tacoma, Wash.. Naming the company after his father, Chris started Lee’s Demolition in 2020. Although the company can do anything from streets and bridges to restaurants and schools, Lee’s Demolition specializes in construction work as a subcontractor with private prime contractors engaged in road infrastructure projects throughout Washington State.  

According to Chris, what’s tough about the business (besides the actual work) is managing the cash flow. A lot of “floating capital” is needed until your receivables are paid after 90 days, a standard practice in construction.

“That's the toughest part. A common reason why these businesses fail is because most people don't have a lot of money to wait until your receivables are paid. We have bills to pay every month: payroll, insurance, union dues, rentals. You have to pay everything every month, but then you don't get paid for 90 days. I have to rob Peter to pay Paul, and cash flow is an ongoing challenge even when your business is established.”

Seeking funding for equipment purchases and working capital to cover payroll and project costs during the busy spring and summer road construction seasons, Chris connected with Craft3 via a referral from the City of Tacoma. The loan application process took about 3 months.  

Chris said he was initially intimidated because he didn't know what some financial terms meant. “But then Craft3 broke it down and said, ‘this is what this is, this is what it's supposed to be, this is what that means’ and it took the intimidation factor away once I got a better comprehension of what the terms actually meant.”

Craft3 helped Chris every step of the way, including assisting with getting all the supporting loan documents put together and ready to go. This included projections, profit and loss statements, debt to income ratios, and other financial documents. In the end, Craft3 helped him secure an $80,000 loan for a construction truck and equipment​. Chris described the process as a stepping stone to expanding his business.

“The primes - the public works departments - are pushing you to do more. They want to give you more of the work.” Chris is up for the challenge. After working on 60 contracts in three years, Lee’s Demolition now has about a dozen employees and is projected to hit $2 million in revenue. ​​More “busy years” to come, as Chris plans to bid for prime work directly with Seattle, Tacoma and other cities, growing his company as the Pacific NW grows.