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Entrepreneur Insight

How a Veteran Used Small Business Loans to Scale Up His Business

May 27, 2019
Entrepreneur and veteran Edward Haynes
(Left panel): Veteran and small business owner Edward Haynes with Congresswoman Frederica Wilson. (Right panel): Haynes Security Services provides security for special events.

A veteran’s success story in building his business into a full-fledged security operation

When Edward Haynes started his security company in 1993, he was what he describes as “a one-man show”—and he remained that way for nearly 20 years. Security had been a natural career move for Haynes, who served in the Marine Corps for six years before becoming the first African American police officer in Miami Shores, Florida. He also served as an instructor at the police academy before he left law enforcement to become an entrepreneur.

In 1995, Haynes moved to Los Angeles and began working as chief security officer for the World Literacy Crusade, offering executive protection services for entertainers and politicians with whom the organization partnered. He says he’s worked with the likes of Chaka Khan, Denzel Washington, Bill Duke, James Ingram, Kashif and Isaac Hayes, to name a few, but Haynes eventually decided to move back to Florida in 2004. Continuing to work in security, he started Haynes Security Services in 2011 and began working with then-incoming Florida Congresswoman Frederica Wilson, who hired Haynes to handle her security. He was also in charge of veterans’ affairs for her congressional office.

Then, in 2015, Haynes Security was offered its big break. Haynes happened to meet the president of a security firm who was keen to work with veterans and who also needed a minority partner to bid on a security contract with Dade County Transportation. Upon learning that Haynes was both a veteran and owned a security business, the security head asked him to go in on the bid together. Haynes agreed, and they won the bid—and suddenly, Haynes Security needed to become a very different kind of business.

“Unbeknownst to him, my company consisted of only me,” Haynes said. “I had about 30 days to take a one-man show and turn it into a full-fledged security operation, which I did.”

But he needed money to do it. When Haynes realized he needed to scale up quickly, he and his wife decided to apply for a loan using her excellent credit. They had been conscientious about keeping her credit score high just for such a scenario. But they were shocked when she was turned down for a loan, and they were struck by the prospect of not being able to access the funding they needed to grow the company.

Applying for a loan successfully

“The last thing you want is to have all of your vendors and clients lined up, only to apply for a loan and for the bank to come back and say that you’ve missed a few areas that makes it difficult to offer financing options,” says Danny Chan, vice president and branch manager at East West Bank. “Business owners can be great at what they do, but because they’re always so busy, it may sometimes mean that they missed a couple of payments. They could have delinquencies from that time they forgot to pay for utilities or even the trash company, that could have dropped their credit by 50 points.”

[Also read: SBA Loans 101: Frequently Asked Questions]

For Haynes, he was able to connect with the local business community through Congresswoman Wilson, and he was directed to the Small Business Development Center at Florida International University. He found mentors who helped him organize his business and apply for a $50,000 small business loan through the Miami Bayside Foundation.

That $50,000 transformed the business. In short order, Haynes was able to hire employees, establish a payroll, and implement other key business elements needed to qualify for the lucrative government contract. During the next 12 months, he and his family worked overtime, with his wife, daughters, and sons-in-law willing to work salary-free to help the company enter its next phase. “It was all-hands-on-deck, and we just pulled the company together and we made sure that we were able to do what we needed to do,” he said.

Haynes ensured that the company paid its installments regularly and on time, and within two years, the Miami Bayside Foundation offered him an opportunity to apply for a second loan of $100,000. He took them up on the offer, and the company has continued its rise ever since.

Haynes recalls that in the year following the initial loan, the company only earned $150,000 in revenue. In 2018, it earned $1.5 million. Haynes Security Services is thriving, so much so that Florida Sen. Marco Rubio named the company the U.S. Senate Small Business of the Week on February 8, 2019. The company continues to hold county contracts as well as other business engagements.

“There is a tip for repaying these loans,” says Chan. “Before paying it back, always think about whether your business is in a growth stage or a mature stage. If your business or industry has already plateaued, the best way to enhance your balance sheet or income statement would essentially be to look for new ways to save costs. This may be about refinancing, or if you’re a larger company, it could be about buying back shares or consolidating partnerships. If you’re in a growth stage, you need to consider whether paying off that interest rate is more important or (if) leveraging access to capital is more important. As you’re paying down your loan, you are losing expendable capital.”

Making a lasting impact

Haynes Security Services has grown rapidly since its early days when the founding family worked with no pay to get what was essentially a new company off the ground. The founder notes that he’s been able to support 35 families through employment with the business and that some employees have gone on to serve in the military or in law enforcement after boosting their careers with the company.

Danny Chan, vice president and branch manager at East West Bank
Danny Chan, vice president and branch manager at East West Bank
“There is a tip for repaying these loans. Before paying it back, always think about whether your business is in a growth stage or a mature stage.”

-Danny Chan

But the impact of that first $50,000 loan extends well beyond the business itself. Haynes is a member of the Circle of Brotherhood, a Miami advocacy group centered on reducing gun violence. He and eight others, called the “Hunger 9,” recently went on a multi-day hunger strike to raise awareness of gun violence in the city. But he said he is only able to commit himself to such an action because of the type of business he heads.

“I’ve been able to build a company that sustains itself while I’m on a philanthropic mission to address gun violence,” Haynes said. “So not only was the money valuable in creating a business that has been able to employ families and help individuals further their careers, it’s also impacted the community.”

Haynes Security Services today remains a family operation—Haynes’ wife is CFO and his daughters work for the company as well. But he is committed to helping other families achieve their goals. He told the Miami Herald, “I also want to help my employees become complete persons so they can survive on their own. I want people to become so proficient that they leave me and start their own business.”

Learn more about how SBA loans can help your business grow

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