Jane Yuen-Lin Mahowald and Winnie Yuen-Yee Crosbie

Jane Yuen-Lin Mahowald, the  small contractor who lacked sufficient working capital to take on all the industrial-commercial painting jobs she has won this year, has attracted a financial partner whose backing will take her several-year-old Assure Quality Painting to profitability this year.

“This financing will allow me to finish jobs with profit this year,” said Mahowald, who said the agreement is with two individuals. “Now I know I will be funded so I can bid more jobs. We will sign a contract for each job and what expenses will be before I get paid [by the general contractor], and work out interest for using that money.”

Mahowald, a Chinese immigrant who raised a family working a variety of jobs, launched Assure several years ago, with the backing of her twin sister, Winnie Yuen-Yee Crosbie, a successful Realtor, as I wrote last month.  It took Assure longer than anticipated and more money to get licensed, certified as a minority-female-owned business, and break into the business.

The sisters, who have invested about $300,000, finished jobs that generated over $2.5 million in 2015-16, but they lacked the working capital to finance additional jobs that would push them to positive cash flow.

Mahowald said the additional capital will help her execute on eight more bids she has won this year that total more than $1 million. Assure employs up to 15 workers at peak. Mahowald tries to hire minority painters who are still getting a foothold in the industry. Mahowald lost one job this spring when a general contractor reversed himself after determining Assure Quality didn’t have sufficient financing. Now, she expects to bid more business.

General contrctors, typically take up to 90 days from the time work starts to pay  subcontractors. Capital-short, rookie subcontractors often wash out. They lack the resources to self-finance until they have built a big enough operation. Banks generally don’t loan to businesses that can’t demonstrate positive cash flow.

“I spent $65,000 last year on renting equipment for several jobs that I could have bought for under $40,000, good used or new equipment,” Mahowald said last month. “But I didn’t have the money at once, and nobody would lend it to me. It’s kind of a vicious cycle.”

The Bloomington woman also said she plans to get some business counseling from WomenVenture, the St. Paul-based female-business counselor and financier.

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