We were hit with several problems at once when the economy collapsed. I run an interactive marketing agency that primarily serves clients in the financial industry. So when the financial crisis hit in 2008, it hit our business hard. Several clients couldn't afford to pay for work that we'd already completed. Those losses totaled a month of payroll expenses, and if things didn't change, we were going to have to make some tough choices about the business.
Meanwhile, our credit line with our bank was up for renewal. All signs pointed to a renewal, but we couldn't be sure, given the financial uncertainties we and everyone else were facing.
We didn't know if the sky was falling and weren't sure how to plan for the future. Should we go forward with much-needed upgrades to our phone system and server infrastructure? What about the new hires we'd recently made in anticipation of transitioning from startup status to full-fledged company? Could we continue this growth path?
In order to take advantage of this recession, we needed to get creative. Turns out, our local government was the best resource to help us make it happen.
Getting a LIFT
The strategic adviser to the governor of Delaware is an acquaintance of mine. We met for lunch in early 2009, and he told me that they were having trouble alerting business owners to government initiatives designed to help them weather the recession.
He brought up a program called LIFT [PDF], which gives eligible small businesses interest-free loans -- with no payments required for the first two years of the loan. Businesses have five years to pay back the principal to the state, interest-free.
Needless to say, we jumped on the opportunity. Within six weeks, the LIFT program had helped us open a new interest-free line of credit with our bank.
Expanding during a recession
We took out the maximum loan of $250,000 and decided to focus on expansions that would boost our business in the long-term. Now that we had money to spend, the recession began to work to our advantage.
We started by making a few senior-level hires from the sudden glut of experienced unemployed executives in our field. Out of that pool, we found great people who might not have been available before the recession. The money didn't come close to completely covering their salaries. But it provided a buffer until they could start earning money for the business.
Vendors were also offering discounts to drum up business. So we were able to negotiate excellent rates on our long-planned infrastructure upgrades. These investments paid immediate dividends by making our team more productive and competitive.
A growing company
The interest-free loans we secured through the LIFT program have allowed us to invest in our company with minimal risk. Those investments have made our clients more confident in us, and they've in turn increased their budgets. Now we're growing at an incredibly rapid clip.
Our revenue rose from $5 million to $10 million, and we've increased our workforce from 30 to 52 employees. Early next year, we will expand to two additional floors in our Delaware home office. We've opened a Philadelphia office and are looking for space in Washington, D.C.
There's a saying I relate to: "Luck comes to those who are prepared to take advantage of it." Our investments, with the support of the state, allowed us to be prepared for the bigger opportunities that might have otherwise gone elsewhere.
Know about a similar program in your state? Share the details in the comments.
Lee Mikles is the author of a book on social marketing, Engage Your Brand.
-- As told to Kathryn Hawkins