MONROE - A business with a cash flow problem is usually a source of concern for lenders; cash flow can make or break a business.
But in the case of Bargains Galore, a locally owned and operated discount store on West 6th Street in Monroe, "it's really a good problem to have," said Joe Klein, Vice President at Sugar River Bank.
Because of the popularity of the store and a change in suppliers' credit terms, Bargains Galore owner Cindi Egger is "having a hard time keeping inventory on the shelves," Klein said, and his bank has already approved additional loans for the business. Klein said Egger's loan payments are up to date and on time.
Klein and Egger met with members of the City of Monroe Revolving Loan Fund (RLF) Committee to ask for a second loan through the fund, this one for $15,000.
The City of Monroe Revolving Loan Fund Committee approved a $20,000 loan to the then-new business on July 12, 2011. They especially liked the location of Egger's business. The loan, at 3 percent interest for a 3-year term, was for the purpose of inventory purchasing. The city has first lien on the inventory, a second lien on personal property, and another lien on a private residence.
Sugar River Bank, the primary lender, also approved its own $20,000 start-up loan.
Klein asked for Egger's new loan to have a 7-year term and for the remaining original RFL loan, now at $14,600, to be extended for another three years, for a total of seven years. RFL rules allow only up to seven years on the loan terms. Both loans will be at the same 3 percent interest rates.
Egger agreed to add another 3/4-time employee to qualify for the loan. She said she would have "no problem" adding the additional employment, and had seen a drop by about the same amount in employee time during the last two weeks.
Klein said suppliers shortened credit terms not long after Bargains Galore opened, which never gave Egger time to establish a comfortable cash flow, and at times, she has ordered half shipments to keep shelves stocked.
City Administrator Phil Rath said the success of the business and this request for more funds "shows a need for this type of program (RLF)," for people like Egger who "maintain a good business at it."
Two other RFL loans are delinquent or in default.
A loan to Computer Heroes, 132 West 6th St., is in default, with $26,000 due to the fund, and the business is in foreclosure. Rath and City Attorney Rex Ewald will investigate the city's collateral holdings and report back to the committee.
A loan to CPP Computers is delinquent, with $24,000 remaining. Owners Hans Wampfler and Julie Stratman indicated to the city that they intend to continue payments and are awaiting the final details of the sale of a building on 8th Avenue that once housed the business. Committee members voted last year to allow the real estate sale. The committee will also review that loan at its next meeting, which is not yet scheduled.
But in the case of Bargains Galore, a locally owned and operated discount store on West 6th Street in Monroe, "it's really a good problem to have," said Joe Klein, Vice President at Sugar River Bank.
Because of the popularity of the store and a change in suppliers' credit terms, Bargains Galore owner Cindi Egger is "having a hard time keeping inventory on the shelves," Klein said, and his bank has already approved additional loans for the business. Klein said Egger's loan payments are up to date and on time.
Klein and Egger met with members of the City of Monroe Revolving Loan Fund (RLF) Committee to ask for a second loan through the fund, this one for $15,000.
The City of Monroe Revolving Loan Fund Committee approved a $20,000 loan to the then-new business on July 12, 2011. They especially liked the location of Egger's business. The loan, at 3 percent interest for a 3-year term, was for the purpose of inventory purchasing. The city has first lien on the inventory, a second lien on personal property, and another lien on a private residence.
Sugar River Bank, the primary lender, also approved its own $20,000 start-up loan.
Klein asked for Egger's new loan to have a 7-year term and for the remaining original RFL loan, now at $14,600, to be extended for another three years, for a total of seven years. RFL rules allow only up to seven years on the loan terms. Both loans will be at the same 3 percent interest rates.
Egger agreed to add another 3/4-time employee to qualify for the loan. She said she would have "no problem" adding the additional employment, and had seen a drop by about the same amount in employee time during the last two weeks.
Klein said suppliers shortened credit terms not long after Bargains Galore opened, which never gave Egger time to establish a comfortable cash flow, and at times, she has ordered half shipments to keep shelves stocked.
City Administrator Phil Rath said the success of the business and this request for more funds "shows a need for this type of program (RLF)," for people like Egger who "maintain a good business at it."
Two other RFL loans are delinquent or in default.
A loan to Computer Heroes, 132 West 6th St., is in default, with $26,000 due to the fund, and the business is in foreclosure. Rath and City Attorney Rex Ewald will investigate the city's collateral holdings and report back to the committee.
A loan to CPP Computers is delinquent, with $24,000 remaining. Owners Hans Wampfler and Julie Stratman indicated to the city that they intend to continue payments and are awaiting the final details of the sale of a building on 8th Avenue that once housed the business. Committee members voted last year to allow the real estate sale. The committee will also review that loan at its next meeting, which is not yet scheduled.