Interiorscape Borrower Learn from My Experiences

Making a profit is seldom easy in any industry, but borrower beware, especially interiorscape business owners.

My First Borrower’s Story

In 2000, I had a great credit score. With company cash flow steadily increasing, money was easy to come by. I’m smiling, thinking back to when I walked into my local bank branch, filled out a simple application, and walked out an hour later with a twenty-thousand-dollar credit line. The bank didn’t care what I was using the money for, and I was not diligent about it either. Boy, did that loan and others return to haunt me when the housing bubble burst and my company’s cash flow dried up quicker than a puddle in the Sahara.

Clients began cancelling. Debt began skyrocketing. I remembered something the former owner of my interiorscape business said: “Just as certain as this business will go through good economic times, you will also go through bad. The trick is … if you want to make it out of the hard times—don’t get yourself into debt and you’ll survive.”

This was excellent advice. I just ignored it at the time. I was young, reckless, and enjoying life.  Sure enough, though, he was right. After going through that extremely stressful and devastating recession, I have been extremely cautious about taking on any company debt with my second business.

My Borrower Story Today

interiorscape borrower

The economy is growing, and the housing industry has become a seller’s market. This past year, I realized having no lines of credit from a rich relative or bank has prevented me from expanding my services. Now that I wanted to start borrowing again, I found nobody wanted to lend money because my business does not have a credit score. 

Searching for help, I contacted Dunn & Bradstreet. They offered to find the credit history I needed but it would cost me several hundred dollars. Not wanting to pay that kind of money, I decided to work on it myself.

I first reached out to vendors I have been doing business with for years. Large greenhouses and floral suppliers that offer credit terms were my first opportunity. When I needed a new van, I asked the dealership to finance it through a commercial lender so the payment history would show up under the business. Creditors are more likely to finance a high-risk business when there is collateral they can recoup. The interest rate was higher, but I felt the opportunity for a better company score was worth it. 

After six months of keeping up with all my financial obligations, my phone, mail, and email started to flood with loan offers. I have found creditors that bombard you tend to be much costlier. Some would say these are predatory loans, where the terms would be the same as a loan shark. Interest thirty percent or more, pre-payment penalties, and expensive late fees are all part of the package.

When you’ve been struggling for years just to open a credit card, offers for several thousand dollars can seduce you. Without a solid plan for using the money to increase profits, this type of financing can become a nightmare. After all, there’s a reason why businesses like this charge so much interest: the odds for most companies to successfully repay them are low.

The Future for This Borrower

interiorscape borrower loan

Realizing loans like this are a big risk when my gross sales have been conservatively increasing, I’m now seeking an SBA loan which offers much better terms and reasonable interest rates. The downsize of obtaining a government backed loan is the process. Like most dealings with the government, the SBA process is much more involved, with time consuming requirements. So much so, I have to continue this conversation in another blog.

Sherry has been part of the interiorscape industry for over fifteen years, starting at an entry level job at North Florida's largest greenhouse and currently owning two horticulture companies. At UMaine, Sherry majored in English where she worked part-time writing scripts for a local college TV studio.

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