Line of Credit Keeping a Florist Afloat
Author: Valerie Mellema
Date posted: 08.30.22

A medium-sized flower shop in the Midwest had been plugging along for years. The owner was a garden lover and had created the company as a way to make money with something he was utterly passionate about. Located in a large city in the heart of America, the business had its moments of slow sales but things always managed to pick back up again. With an array of flowers and great customer service, it seemed this floral shop had nowhere to move but up.

How COVID-19 Caused Problems

COVID changed the world and brought with it some issues to the floral shop. More people were spending all their time indoors and not visiting local businesses. At first, it seemed that the smaller and less frequent orders would be a short-term problem but COVID raged on and made the problem more pervasive. Savings started to dwindle but the owner had no desire to let the business go. He was going to have to start thinking creatively to ensure there was enough money available to remain open when people needed his wares and services.

 

Bringing in Financing to Stay Open and Stocked

With no clear indication of when things would become positive again, the owner started to look into the options. The amount needed could vary based on whether things got better or worse during certain months. However, having at least $50,000 available to use when and if needed seemed like a great option. This would ensure there was some money available for supplies, paying workers, and other needs until things were back to some version of normal. The owner looked into various options to see if one financing method would be far better than another.

The Introduction of a Line of Credit

A traditional business loan was a possibility but didn’t seem quite right. Making the same payments every month could be challenging. Plus, the owner wasn’t sure they needed a large lump sum. It was just important to have access to money when needed. The thought of a line of credit made sense. It would leave the owner with money to dip into as needed, rather than a sum that might not be used but would still need to be paid back. He knew that with a line of credit, he’d only use what was needed and the rest would be there if required.

 

Reasons to Select the Line of Credit

One of the most recommended loans, when there are cash flow problems, is a line of credit. It’s possible to cover all sorts of things, from payroll to supplies, to ensure a business runs well. A line of credit lets a business owner draw money as needed and often has a better interest rate than a business credit card. The requirements were easy enough for the long-time florist to quality based on length of time in business and annual revenue.

How Things Turned Out in the End

After receiving a line of credit, the fluctuation in business wasn’t as big of a challenge. When things were slow, some of the money could be used. If business was booming, more could be paid back. COVID-19 was a challenge but things eventually picked up and the florist was available for all the people who needed him. Today, the floral shop is doing better than ever. All the money has been paid back but the line of credit is still open. If things ever change again and money is needed to keep things running smoothly, it can be used at that time.

About The Author | Valerie Mellema

Valerie has over 16 years of experience as a professional writer of blogs, eBooks, articles and press releases, with a focus on finance and alternative lending. Valerie resides with her family in Texas and is passionate about her horses.

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