WILLISTON, N.D. – Williston Economic Development (WED) and the Small Business Development Center (SBDC) were not afraid of trying something new to help a primary sector startup get going in Williston. The two groups partnered with Tri County Regional Development Council and First International Bank and Trust Company to assist FlowCore Systems during its first few years.
“FlowCore’s dilemma was not unique to what other manufacturing startups encounter,” said WED Executive Director Shawn Wenko. “The delay in accounts receivable from when a product is ordered, produced and delivered can severely limit available capital and hamper the rate at which orders can be full filled. Young startups are already saddled with high up-front costs that limit available capital to be used for the purchase and development of their product. Startups like FlowCore face an even greater hurdle in trying to secure additional capital for development. The fact that a business is new and innovative can still pose an element of risk. The risk is what makes lenders and investors cautious in deciding how much investment should be made up front. It’s a classic chicken and the egg; you need to fill the orders to secure revenue for future orders, but you don’t have the revenue to do this until the orders are filled.”
FlowCore utilizes patented technology to manufacture a device that measures chemical for injection into various applications down to the tenth of an ounce. The company started in 2013 with two employees and at the height of 2020 had 11.
While WED has several programs it can offer through the Williston STAR Fund, none of them met the specific needs of FlowCore. So Wenko and Keith Olson, SBDC Regional Director in Williston, set out to create a program that would loan FlowCore the capitol it needed to manufacture the initial orders of its chemical injection systems.
“We worked with their existing lender (First International Bank) to match a revolving line of credit for the manufacturing of their units,” explained Wenko. “The line of credit was structured as a loan to which all monies accessed would be tied to purchase orders and paid back once the company had received payment for their product.”
“I think we found an innovative and creative way to work with the bank and the company, to fill a gap where there wasn’t really a program to do what needed to be done,” said Olson.
The proposal gained approval by the Williston City Commission in 2017 and involved several entities: WED, SBDC, First International Bank and Tri County.
The proposal provided a revolving line of credit of up to $240,000. It was half-matched by FlowCore’s local lender (First International Bank) and the Williston STAR Fund. The STAR Fund is funded by a one cent city sales tax. Seventy-five percent of the sales tax benefits infrastructure debt relief while 25% benefits job creation and community development.
The program was nothing short of success. At the July 2020 Williston City Commission meeting Wenko was happy to report that FlowCore reached the end of its term agreements and all dollars allocated within this program had been returned to the STAR Fund general fund.
FlowCore’s founder and president, Chuck Black, said they were grateful for the teamwork.
"The collaboration between the STAR Fund, SBDC, Tri County and First International Bank was crucial to the successful launch of FlowCore Systems,” said Black. “Bringing new technology to market is costly, but the economic reward reaches far forward for the community. In five years, we grew from two employees and $20,000 in annual sales to 11 employees and $1.3 million in sales. We have contracts with Continental, Hess, Oasis, QEP, WPX, Equinor and Zavanna. Thank you STAR Fund, SBDC, Tri County and First International Bank."
“This really shows how the STAR fund benefits the community and the value it brings,” said Wenko.
The Williston STAR Fund is administered by a seven-member board. The group meets monthly. For more information call 701-577-8110 or check out the WED website at willistondevelopment.com.