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 create chaos. When a holiday is approaching, a shortage of inventory can inflict serious damage.
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 strategy is to obtain a Merchant Cash Advance in January to prepare and repay the funds throughout the Valentine's Day holiday 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, excellent credit is not required to obtain 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 method 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 asked. I let her know it was the neighborhood florist. "I've always loved that place. I hope they never disappear," she remarked. As long as they manage cash flow and have access to capital in these turbulent times, they never will. Fortunately, they have Merchant Cash Advances as an option.
