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Question – I opened a children’s consignment store in July of 2011.  As a single mother of two girls who enjoys shopping  for them I was frustrated about how expensive it is to buy clothing and toys for them so I started my store specializing on selling new and used children’s items such as clothing, shoes, toys, baby gear, etc. at affordable prices to be a one-stop shop for moms like me.  It is the only store like it in my area unless you drive over 45 minutes away.

 

In my first full year, I made $27,000 and a profit of $7,000.  It’s not a lot and it’s my only source of income besides child support but I see a lot of potential by taking the business to a new level.  In order to “wow” customers, I want to remodel the building (I rent) with a bright kid-friendly atmosphere (pink and aqua walls) and a cute children’s play area so moms can shop while the kids play.  Also in the remodel, some walls will be torn down in order to increase sales space for to include larger items and also hanging clothes racks to make more room on the floor.  In addition, fresh paint will be added to the entire store, a dressing room so parents don’t have to take their children in the bathroom to try on clothes and a new custom countertop for tagging items and storing supplies.   Rounding out the remodel will include a point of sale computer system and a washer and dryer to clean incoming clothing.  I also need money to refinance a high interest credit card and inventory which will allow for a better profit margin than through consignment.  My total amount needed will be $20,000 and my credit is mediocre.  Any ideas on how to get money to expand my children’s consignment store?

 

 

Our Response – To say you aren’t going to have some struggles in finding financing would not be truthful with mediocre credit and a single income of only $7,000 last year.   You may try traditional bank financing but at best you would be looking into a credit builder product or unsecured personal loan which will be at a high interest rate.  Other sources you may look into are microfinance organizations such as www.accion.org or www.kiva.org or your local economic development revolving loan funds.  You could also look into social lending marketplaces such as www.prosper.com or www.lendingclub.com which allow individuals to loan money to people who don’t always look at just a credit score when making a loan.

 

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