A bright idea: SBA Seasonal CAPLines program helps maker of holiday light repair tool fulfill orders

John DeCosmo (right) and the team at Ulta Lit.

In spring of 2016, Glenview, Illinois-based Ulta-Lit Tree Company was entering into its busiest time of the year when owner John DeCosmo learned that the company’s purchase order line of credit was not going to be renewed. But when DeCosmo tapped into his longstanding relationships with First American Bank in Elk Grove Village, Illinois, he learned of a valuable opportunity: the SBA’s Seasonal CAPLines Program. Within a few weeks, the company had closed on a SBA-guaranteed loan from First American Bank worth $1.5 million. “I don’t know where we’d be without that loan,” DeCosmo said.

The SBA’s CAPLines program provides loans up to $5 million to help small businesses meet their short-term and cyclical working capital needs. The Seasonal Line of Credit Program, one of four distinct loan programs under the CAPLines umbrella, supports the buildup of inventory, accounts receivable or labor and materials above normal usage for seasonal inventory.

Ulta-Lit was well suited for the program. The 20-year-old company started as an importer of pre-lit Christmas trees, but today it is best known for the LightKeeper Pro, a handheld device that repairs incandescent holiday light sets. Most years, the company has made most of its sales – its customers include big-box stores such as Target, Wal-Mart, Lowes, Ace Hardware, and Home Depot – by June. The SBA loan helped the company fulfill the orders.

As part of the SBA’s Preferred Lender Program, First American Bank is familiar with the SBA’s wide variety of loan programs and how they can help clients achieve their goals. “In the case of Ulta-Lit, knowing the company and its owner had a positive experience with a previous SBA Loan, I felt the programs could be an option for the client a second time,” First American Bank Vice President JB Phillips said. “As we discussed Ulta-Lit’s needs I relied on the knowledge of my SBA program experts at First American Bank, who recommended the Seasonal CAPLine Program to provide the financing necessary for the company to fund their business for the approaching Christmas season.” 

DeCosmo’s entrepreneurial journey started early, as he grew up watching his father, who worked for a company that made artificial Christmas trees. He remembers reading the company’s annual reports as a child and being intrigued. DeCosmo graduated from Indiana University Bloomington in 1983 and took a sales job in Chicago for many years, but in 1996, Ulta-Lit was born. Being the only provider of affordable pre-lit Christmas trees – their one competitor sold at a much higher price point – sales were robust.

“1999 was our best year and our worst year,” DeCosmo said. “We sold our product with a five-year warranty, and all of the trees were burning out prematurely.”

DeCosmo challenged an engineer to solve the problem, and within 15 minutes, the engineer had created the light repair kit. The device has evolved, and it now includes a trigger technology that instantly repairs the malfunctioning bulb “shunt,” which is the most common problem of light set failure. It also includes an audible voltage detector, bulb and fuse tester, bulb puller, and storage organizer. More than 4 million light repair kits have been sold.

As the company grew, DeCosmo wanted to buy out his engineer, including the patents on the LightKeeper Pro. So in 2007, he sought and was approved for his first SBA-guaranteed 7(a) loan for $1.5 million. “As a result, I own 100 percent of the company,” he said. It was also the first time he saw what SBA products and services could mean for the health of his company.

Today, Ulta-Lit employs five people year-round and another five seasonally. Sales have dipped since 2012, when they hit a high of nearly $6 million, but they are back up 10 percent in 2016. “I’m not going to be happy until this is a $10 million operation,” DeCosmo said.

With that goal in mind, the business owner has refined his entrepreneurial strategy over the years. Learning to say no has been important, as well as recognizing when a new product has been, in his words, “a dud.” Early on, DeCosmo was hesitant to spend money on advertising – but finding an effective marketing strategy has been one of the most important lessons of small business ownership. The LightKeeper Pro has been sold on home-shopping networks, and commercials have aired on cable home-improvement channels. Through it all, DeCosmo has focused on maintaining partnerships with his bank, the SBA, employees, vendors, customers, and his local community, as well as striving for improvement.

“If I were one to quit early, I think we’d be more profitable today, but less profitable tomorrow,” he said. “Don’t ever stop trying to get better.”

Company Name: 
Ulta-Lit Tree Company
Location: 
Glenview, Illinois