Norman and Jules Toy Shop - Brooklyn, NY
Courtney Ebner and Avi Kravitz, the owners of Norman & Jules Toy Shop, have enough cash on hand to pay for inventory and cover a potential "uh-oh" situation.
It wasn't always that way. The husband-and-wife team knew little about ordering inventory or balancing the books when they opened their toy store in Brooklyn's Park Slope neighborhood in 2012.
They funded the store with liquidated stocks, cash and credit card advances that carried high interest rates. Later, after ordering more inventory than they were selling, the couple took out a loan with a 17 percent interest rate to pay suppliers and access working capital.
"We researched our idea for two years before we finally opened our doors," Ebner said. "But we definitely made some rookie mistakes."
At the urging of their accountant, Ebner and Kravitz contacted the Brooklyn Chamber of Commerce to find out how they could pay down their debt. The couple was approved in March for a $70,000 loan through The Brooklyn Fund. They used the seven-year, 7.25 percent interest loan to refinance their high-interest debt.
The Brooklyn Fund provides Brooklyn-based small business owners with government-backed loans up to $350,000 through the U.S. Small Business Administration’s Community Advantage and Small Loan Advantage programs.
Ebner says the fund gave them access to more than a loan. The resources associated with the program gave them a clearer understanding of their business.
"It's been an amazing process. Avi and I have learned so much," said Ebner, who opened the toy store with her husband after becoming frustrated at their inability to find suitable toys for their daughter, Charley, now 3.
The $10 million Brooklyn Fund was launched by the Brooklyn Chamber of Commerce in May 2013, in partnership with the New York Business Development Corporation and the Brooklyn Chamber's NYC Business Solutions Center. In addition to having access to loans ranging from 6 percent to 8 percent, potential borrowers get help with their business plans and budgets and other technical assistance.
"Our business is so different now. As part of the loan application, we had to dive in to so many nooks and crannies of our business. We had to really dissect our finances," Ebner said.
Paying off their high-interest debt gives Ebner and Kravitz the working capital they need to focus on growing their business. The couple recently hired search engine optimization (SEO) experts to increase their online presence, an area in which they see large growth potential because of the niche nature of their business.
Norman & Jules Toy Shop operates with a socially conscious, eco-friendly philosophy, selling hand-crafted, sustainable toys that the couple says are vital to a child's development. Some of the toys are made by local artisans.
"No technology, no batteries, no blinking lights," Ebner says. "We want our toys to ignite kids' creativity and senses."