Bratton Construction is the latest Portland company to sell small business bonds on the fintech platform SMBX.
It is a pivotal time for the construction company as it has two, five-year, multimillion dollar deals set to start plus a pipeline of other work coming down the pike, said founder and CEO Sharon Maxwell. To set the company up to continue to grow and scale with the work she is raising between $50,000 and $350,000 on SMBX.
The company has so far raised $38,700 with 35 days left on the campaign. It needs to raise a minimum of $50,000. The bonds pay 9% interest over 60 months.
“We are really excited about this. SMBX for us is a game changer,” said Maxwell. “As a minority, woman-owned business in a male-dominated industry going to the banks and trying to secure a line of credit and capitalize to be able to scale and grow, we have struggled over the years. Even after showing good results and great financials we are still (told) that is not enough.”
In 2020, Maxwell was one of several Black business owners to talk to the Business Journal about the challenges of obtaining traditional bank lending.
Bratton Construction's growth drivers
The company will use funds raised in this effort for hiring, equipment, truck and trailer purchases and operations. This is needed, Maxwell said, as the company gears up for two big contracts won by the company.
One is a five-year contract with TriMet for $1 million each year. The company’s first project on that contract is work at the Gateway Transit Center to upgrade the bus layover area and other repairs. The second contract is a three-year agreement, which can be renewed for another two years, for $1 million each year with the city of Portland. This is for building alterations and repairs for commercial buildings, Maxwell said.
“We are trying to expand and we need to purchase trucks and trailers and equipment and hire so we can handle the volume and demand of the work,” she said, adding that cash flow is important because she needs to make these investments ahead of the first task orders coming in and then it can take 45 to 60 days to get payment on a project.
“Without this cash flow it really makes it difficult for us to scale and grow,” she said.
Access to capital hustle
To get through the pandemic Maxwell has hustled to land various grants for small businesses from organizations like Kaiser Permanente NW, Ikea, Comcast and Black United Fund of Oregon. This week, she completed a leadership program with the Port of Seattle designed to help women and minority-owned businesses bid on port projects.
SMBX is a San Francisco-based crowdfunding platform. But instead of selling equity in a business or offering marketing promotion, it allows non-accredited investors to loan businesses small amounts of money. The platform is registered with the Financial Industry Regulatory Authority and businesses on the platform have been vetted. Bonds on the platform can be bought and sold on the SMBX marketplace.
Maxwell has been recommending the platform to her peers. In fact, Portland has been “exceptionally receptive” to the platform, said Peter Barden, vice president of communications for the company. The company has even hired a Portland sales and community representative to keep up with interest.
Since SMBX launched in February 2020 there have been nine Portland businesses that sold bonds on the platform. Those companies have raised a total of $919,700, according to the company. Several other Portland businesses are going through the SMBX underwriting process now and should launch campaigns soon.
For Maxwell, this process is one of turning to the community to invest in her so that she can in turn invest back into the community through jobs and projects.
“Banks don’t help small businesses like they say they do, especially if you are of the BIPOC community, you aren’t always sitting on collateral and that is what they want,” she said. “We actually have to work extra hard to get where we are at. If SMBX were around two or three years after I had started, way back in 1999, it would have been a different story (for us) for sure.”
