No SBA, No Investors: The Liquidity Access Line

And it's never, you know, just switch all your budget to direct mail. But it's enough to say, let's start a controlled trial. We're going to take an acceptable budget, we're going to be very specific and measure return.

We're going to be very targeted on who your audience is and then we're going to see if it's a, you know, if it's a good fit to continue ongoing. And more often than not, that approach has worked well and driven some growth.

The reasons that people have heard many times buying small means a lot more fragility, it would seem in the business itself, but there can be benefits as well. How did you think about it?

Yeah, I would say, you know, if someone's looking at buying small, the, the leg I mentioned, the legacy, I mean 30 years local reputation just critical to fall back on. So you know, I, I, speaking of the risk, early on I, you know, I did say well, well how much can I, can I afford?

You know, I mentioned with the, the full time job I didn't feel that I had a, I had the bandwidth necessarily to open up a funded search to, to raise capital and, and do this full time. So, but I did look at, you know, going bigger than the HBR guide and others kind of assume the, the SBA route. So I certainly looked into SBA and I think it's, it's Live Oak bank that a lot of people use that…

And you know, I was surprised that the rates, the interest rates were, you know, they were very high. So I think I was quoted, you know, 12 to 14% interest and that was going to be a recurring payment right off the bat. And I had uncertainty on the business cash flow and so I saw that as a significant risk and something that I wouldn't, you know, be able to just kind of pivot out of.

So as far as a scope for when I, when I define what can I afford, I'm thinking I'm leaving Adobe. Over time at Adobe they, you know, I've gathered restricted stock units and employee stock purchase program. So I had a big concentration of wealth within the company.

If I'm leaving Adobe, I'm going to stop getting those and you know, essentially by betting on myself, I should kind of take some of that money off the table and not bet on a company where I'm not Even working. So I was, I liquidated some of that position.

And then we, we went through an exercise of consolidating everything that we could into our primary bank, where we've got our, our, our financial manager overseeing the, the investments and the other things that we had. So that's all combined. So I've kind of maximized the collateral with a bank that we're with and worked with them to open up a liquidity line.

So as a, essentially line of credit that I was able to borrow against to get cash with no obligation to repay. And so it gains interest at about half the rate of what an SBA loan would. And I did make a habit of paying that interest every month, but if I needed to skip a couple months because the cash flow wasn't there, then I could do that without penalty.

Okay, hold on a second here, Brian. We got to unpack this.