Case Study: Multi-Store Furniture Retail

by Mark Finkelstein

A few years back, I was starting to feel like it was time to package and sell my three furniture stores in Southeastern Pennsylvania. I discussed my situation with a business broker and was shocked to find that my net, after paying what was owed, would not get me started in anything else or replace my lost income from the stores for more than 6 months. My business broker’s suggestion was simple, do what I could to grow the top and bottom lines of the stores.

It was an easy solution, but how? Because of the economic downturn caused by the housing crisis that had lasted for almost a decade, my credit was in the toilet and bringing in an investor would simply have watered down my interests so that my share of any sale would have left me in the same place as before the investor was brought in.

 After researching short-term merchant cash advance loans, it became clear that with careful planning, the costs which seemed high, were easily absorbed and proved a small part of growing my business. My plan was to utilize the funding for each major sale during the year, using the funds to advertise and expand my inventory just prior to each sale. We were more than doubling our money from the margins and we knew that each customer had 3-4 turns based on their purchases and recommendations to family and friends. Understanding that furniture purchases in large part were major impulse buys, we were able to get customers the furniture they wanted in their homes the next day.

 Within 18 months, I was able to complete the sale of the stores. Over that time period, I was able to repay all of my debt and my net was substantial. All of this without bringing in any new equity partners to share with me what I had built and sweated over for almost twenty years.

Merchant cash advance loans, as an industry, is growing at a phenomenal rate irrespective of all the negativity it receives from standard financing sources. The reason for this growth is in three simple reasons: the simplicity of the industry’s requirements, that fact that it is for all practical purposes unsecured financing and that they are available to you when the naysayers are nowhere to be found.

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