Hard ‘To Get’ Money For Soft Frozen Yogurt!

Well here’s another one for the books.  The ingredients are these:

 

1. Take one hard working man with excellent credit who has suffered through numerous financial setbacks over the past 30 years.

2. Mix in a business that has been in both Mill Valley and Tiburon for 46 years which he has been running for the past 10 years.

3. Throw in the finest soft frozen yogurt ice cream this side of the Mississippi.

4. Complete this recipe with a consistent net profit each year for the past 4 plus years.

5. And, WHAT DO YOU GET?

 

I’ll tell you what you get, a successful cash flowing business that cannot get one bank to provide this hard working Marinite a line of credit for $35,000.  Every bank we turned to - some major name banks, some community banks - all said, “we’re not comfortable with the amount of his debt.” However, he has proven consistent record of paying all of his bills early or on time, he has paid down principal portions of his debt throughout the year, he has maintained 700 credit scores throughout the year, yet no bank would lend him any money.  He simply needed a small line of credit to get him through the 3 leanest months of the year for his business - the winter months - November, December and January.

 

Let’s not forget that he has been running this business for 10 years, lost $200,000 when the town of Tiburon forced his business to close after driving traffic away from Main Street where he had set up shop. All the while Woody’s has been serving the community with not only his phenomenal, sweet tasting, soft yogurt ice cream but supporting local schools by volunteering his time and his business name to their money raising campaigns. Yet, no bank would step up to the plate and provide WOODY’S YOGURT PLACE with a small business loan.

 

This all points to a bigger issue - the TARP money.  Where did all the money that the federal government gave to the banks go and what did it get used for? Wasn’t it supposed to be used to infuse the economy by helping the small business person? If the banks got bailed out, shouldn’t they help ‘bail out’ the small businessman who desperately needs financial assistance to get him through some tight times? Well, my experience as a commercial loan broker proves otherwise. That money hasn’t been provided to the local economy the way it was designed. The banks have kept those funds, fattened up their balance sheets, bought other failing banks and, in general, horded that money.

 

To be fair, perhaps some of the banks that turned Woody’s loan request down didn’t get TARP money, or if they did, maybe they have helped some business people with their financial needs. However, we do know that the big banks we approached definitely did get TARP money. Matter of fact, Woody’s owner has accounts at both of those banks, yet they wouldn’t lend him the much needed $35,000. We’re talking about a business that grosses $650,000 to $700,000 per year.  Moreover, Woody’s owner is not the only businessman that I have seen this happen to. There’s some second thoughts about continuing to do business with these banks.

 

Lending Resources Group was not to be deterred. We continued to seek out a lender that would hear Mike Woodson’s (Woody’s) story and understand his predicament. One local bank which refused the loan was still good enough to refer us to a community center serving a local foreign community in San Francisco which makes some of its money by arranging small business loans through the SBA! Can you believe that?  A foreign community service center who is granting small business loans to hard working, steady Eddy’s like Mike Woodson who need some cushion to get them through a few tough months of their cyclical business year.  What a concept? A foreign community service center that is helping a local American obtain a loan that he couldn’t get from the banks in his own back yard including the bank that he uses for his payroll and credit card services. 

 

That’s exactly how we ended up getting the $35,000 that Mike needed - through the foreign community center.  They were very polite, very knowledgeable and very cordial to Mr. Woodson.  They visited his place of business, interviewed him and were sufficiently impressed as Lending Resources Group has been all along. Mike Woodson is a standup businessman who has persevered and succeeded in the face of great adversity over the past decade while making Woody’s Yogurt Place a household name for soft frozen yogurt ice cream in Marin County!