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Funding for Florists and Floral Shops – An alternative to bank loans

Funding for Florists and Floral Shops – An alternative to bank loans

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Home Page > Finance > Loans > Funding for Florists and Floral Shops – An alternative to bank loans

Funding for Florists and Floral Shops – An alternative to bank loans

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Posted: Aug 01, 2010 |Comments: 0
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Florist lacks funds

I went to buy a dozen roses for my wife last week but the floral shop only had 6 stems left.  When I questioned the manager why they didn’t have more, they cited the economy was preventing them from having enough stock. Mother’s Day had passed  just two months before and I left wondering how that could be. We all know that banks have backed away from lending but surely there had to be a solution.

As it turns out, my neighborhood florist wasn’t aware of their options. According to analysts, florists are one of the few industries that really still have simple access to capital. Merchant Cash Advance providers offer funding quick and florists continue to be on their top 10 most funded business types.

Seasonality
If you’re in the floral business, your world revolves around the make-or-break holidays: Valentine’s Day, Mother’s Day, Easter, Christmas, and Prom/Graduations. Sales can increase as much as  500%. According to Aboutflowers.com, 32% of all adults bought flowers or plants as gifts for Mother’s Day in 2009.  Since that doesn’t happen every day, floral shops have it tough. Over the span of a year, business is profitable but it’s the seasonal cash flow fluctuations that can make chaos. When a celebration is approaching, a shortage of inventory can inflict serious destruction.

A Merchant Cash Advance allows you to receive funds now and repay it by diverting a percentage of each credit card sale generated back to the funding provider. A common approach is to take a Merchant Cash Advance in January to prepare and repay the funds throughout the Valentine’s Day celebration and thereafter.  It’s a perfect fit.

Credit
It’s not uncommon for florist owners to have some negative marks on their credit report. Seasonal sales have probably caused you to make a few late payments at some point. Fortunately, brilliant credit is not required to take a Merchant Cash Advance. Most funding providers require a minimum FICO score of 525. Any lower and you may only qualify for a test run ‘starter funding program’.

Teleflora, FTD, and 1-800 Flowers Friendly
Do you process credit card sales though a national network like Teleflora, FTD, or 1-800 Flowers? You can still take advantage of a Merchant Cash Advance. Funding providers can arrange for a repayment mode that involves debiting your bank account, rather than changing your merchant services provider. Evidence that this works is the sheer volume of florists that are using Merchant Cash Advances. Stores processed in-house through a credit card machine may still need to be converted over.

Use of Funds
While managing cash flow and purchasing inventory are the most common uses of funds, your business is not restricted to doing just that. Use it for any reason such as advertising, building upkeep, supplies, equipment, and hiring new staff.

The Result

When I surprised my wife with a dozen roses today, she was ecstatic. “Where did you get these honey?,” She giddily questioned. I let her know it was the neighborhood florist. “I’ve always loved that place. I hope they by no means disappear,”  she remarked. As long as they manage cash flow and have access to capital in these turbulent times, they by no means will. Fortunately, they have Merchant Cash Advances as an option.

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financeguy74 -
About the Author:

New York City Merchant Services is a national leader in providing capital to Florists and Floral Shops. http://www.newyorkcitymerchantservices.com

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