The First Step Is Showing Up
Term Loan The First Step Is Showing Up
Author: Casey Marie Long
Date posted: 06.08.22

A camping equipment manufacturing firm located in New Mexico had a large tradeshow that they attended once a year in the summer. Over 25% of their sales for the year were the direct result of the show - whether the sales happened at the show or soon thereafter. That meant that each year, they needed to have significant inventory on hand prior to the show so they could have product available at the show and additional inventory that was ready to ship in the weeks right afterward.

Because of covid, the 2020 trade show was canceled and the company’s sales plummeted throughout the second half of 2020. Despite slower sales in 2020, the company sold its remaining inventory during the holiday season. They retained their staff but had little cash when it was time to build up inventory for the 2021 tradeshow. Amidst the pandemic, with the company’s future uncertain, they couldn’t invest in new inventory in 2020. As the 2021 tradeshow approached, they realized that they needed a successful year to keep the company afloat. They also needed to find funds to purchase supplies and maintain payroll during the period of increased manufacturing.

 

The First Step Is Showing Up

The company turned to a bank term loan.  They had to find a loan with a specific amount so that they could start manufacturing their product. Additionally, they needed a reasonable payback period that would give them time to get cash flow back to normal. The bank term loan met their needs perfectly.  They were able to secure a loan of $450,000 with a 5-year loan term. This allowed them to have smaller monthly payments and gave them time to pay back the loan while getting back on their feet. The company owners with low-700 credit scores secured a 9% loan. Much more affordable than credit card financing, the loan offered a fixed interest rate for its entire duration.

With the funds in hand, they were able to order the supplies needed to start building their inventory. This happened just in time to have the product ready for the tradeshow.

 

Though the trade show attendance was lighter than in the previous year, there were also fewer vendors in attendance. This meant that the company’s products received more attention from the attendees. Sales were nearly at pre-pandemic levels by the end of the year.  While the company still had the loan to pay off, they ended the year on a high point and entered 2022 in good financial shape.

The First Step Is Showing Up
About The Author | Casey Marie Long

Casey has 12 years of technical writing experience. She is also a CPA and bookkeeper. Casey graduated from the University of St. Thomas (Minnesota) with a B.A. in mathematics and currently resides in San Diego, CA.

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