A small fluid hauling business was losing business because they couldn’t service more contracts…so Travelers stepped-in to help acquire more trucks and grow the business.
Everyone knows that when the oilfield services sector gets busy, it gets very busy very quickly. This presented a problem for a fluid hauling business in Northern Alberta. With a three truck and trailer fleet busy around the clock, they couldn’t keep up with calls for lucrative work, and in turning work away were only helping their competition to grow.
As drilling activity increased, not only did the demand for fluid hauling services grow, but also the need for Vacuum trucks and Steam Units. With conventional bank financing only taking into account past earnings, the willingness to lend for expansion was very limited. When it was offered, the term and down payment structures made it difficult for a company with high operating costs and aged receivables to utilize them.
Further, the informational requirements both prior to approval and on an ongoing basis tended to be very onerous, which took the management teams time away from day to day operations and forced them to focus on additional record keeping and reporting. This would delay the ability to secure new financing, and made it very difficult to respond to lucrative tenders for work that had very short periods of time until equipment needed to be made available.
That was where Travelers was able to step in. By utilizing forward looking analysis coupled with strong industry knowledge, Mike Dominguez, Assistant VP for Western Canada, was able to help the company quickly double their fluid fleet, allowing them to bid on larger contracts and leverage economies of scale.
“Through these contracts, and with Travelers helping to acquire the needed equipment with limited down payments and terms that allowed for revenues generated to match cash flow requirements, we were able to diversify into Vacuum and Steam operations.”
The business went from a three truck operation to having ten, as well as relying on contractors to pull company owned trailers. The owners were able to hire staff to run dispatch and bookkeeping, and focus on business development to continue growing the business.
Travelers was able to help turn a small, owner operated business into not only an important part of the local economy, but help fulfill the lifelong dream of the owners to run a business that will one day be handed down to the next generation.