DecoCoat from Heerenveen had been growing substantially for some time. Until the corona virus put sand in the wheels. Temporarily, because the medium-term prospects were extremely positive. In order to maintain growth, the Corona Bridge Loan (COL) offered a solution. "Then you know you don't have to pull the emergency brake.
He is amazed at how smooth and fluent the process from application to award went, says Frans-Theo Niemeijer. Sometime around May 10, the founder and owner of DecoCoat had applied for the COL, and just under three weeks later the money was in the account. 'That quick response and handling were hugely important for the company,' he stresses. The bridging loan gave us air, allowing us to maintain the course we had set and continue to grow. 'And growing substantially is what DecoCoat has been doing since its founding in 2016. As a result, the company can do something no other company can: high-quality decoration and painting of bicycle frames based on specific customer requirements.
'What makes our position in Western Europe particularly special is that we can powder-coat metal frames as well as wet-paint carbon frames,' Frans-Theo clarifies. 'It's about customization in the higher segment of bicycles. So not large, serial production, but small series of several dozen to unique single piece work. For example, every customer of the Dutch brand Santos gets to choose from 30 different paint colors and numerous possibilities for decorations. A total of some 30,000 variations are thereby possible to decorate and paint one bike to one's own taste. ' The advance of DecoCoat began when a Danish manufacturer came forward with, for the time, quite large numbers of carbon and aluminum frames. Not much later, the aforementioned Santos followed suit. Things went so fast that the young company had to hire a new employee every two months. In one year, DecoCoat grew from two to ten employees. 'At the same time, we also had to invest in additional machinery such as an oven, powder coating equipment and a paint booth,' Frans-Theo emphasizes. 'With thanks to investment capital from the FOM, we managed to do that too.'
With the arrival of new customers from countries including Switzerland, Germany, Belgium, England and Spain, DecoCoat continued to grow impetuously. The company was, as Frans-Theo describes it, on a rollercoaster when the corona virus struck. 'Last February we heard that containers of bicycle frames could not be delivered on short notice,' he reflects. 'In fact, frames and related parts are still largely produced in China. Our main customer, responsible for 40% of sales, told us that the first containers were not expected to arrive until early June. That meant we were left with significantly less work from March through May. Even though we had just hired additional people. After all, spring is the busiest period for the bicycle industry. So it's safe to say that there was some panic.
Of course, DecoCoat was eligible for the NOW scheme. But that scheme is primarily for the short term and covers only part of the lost sales. More was needed to continue building the company's future. And so Frans-Theo started looking for other support measures. After reading about the COL, he decided to apply immediately. 'From then on, things went fast,' he says. 'Shortly after I submitted the application on the online portal, a call came from NOM asking me to supply some additional information. Not much later I received an agreement and the bridging loan was in. Then you know you don't have to pull the emergency brake. For example, that you can pay suppliers on time and don't have to say goodbye to people you have just trained intensively. Because the bar is high. Customers expect top quality from us. And rightly so; after all, these are pretty pricey bikes.'
Better operating profit
The COL was used by DecoCoat to pay salaries and vacation pay, among other things. But also to make a necessary investment in expanding the electricity supply. 'In addition, the bridging loan made it easier for us to acquire new customers,' Frans-Theo argues. 'And we did, which means that we have a very well-filled order book after the summer. At the same time, prompted by rising bicycle use, existing customers are also starting to turn out in full force again. I know that in the current times it is difficult to make a forecast. Nevertheless, we expect to post a better operating result than last year. Despite the malaise of the spring. Thanks in part to the COL.