BY DOLLY PENLAND, CORRESPONDENT
If there's a lesson to be learned from the recent credit crunch. it's try, try again. 

 

That's what Mary Frazho, president of Hurricane Games of Florida Inc., foun d when starting her new arcade. After establishing a line of credit for her business with a bank, she went to a company that specializes in leasing and lending to family entertainment centers for the equipment. 

 

"My background is in mortgage and banking," she said. "I know how hard it can be to underwrite or qualify someone."

Frazho, along with her husband and her stepson, who previously owned a similar business in Oklahoma, said they were armed with a strong business plan, plenty of experience and their personal commitment to the business.

"My son has 15 years in the business, so we're not talking about a raw rookie, and then his dad and I have good credit
and good collateral. Wehave a viable business plan and all the things I would consider necessary: creditworthiness, collateral, capacity, all those things," Frazho said.

She quickly realized her credit request was not progressing with the company. "They'd said, 'Yes, it 's in underwriting and it's going to committee.' I knew in lending, when something is stuck in underwriting, it wasn't getting to the decision maker. At the same time, my CPA asked if I would consider leasing though a local company" rather than the out-of-state firm she was dealing with at the time.

The new financing option was the Jacksonville franchise of Wirth Business Credit, which specializes in small-business financing. The company offers business leasing services from $5,000 to $300,000 for equipment, furniture, office upgrades and construction, computers, software and other needs.

Through Wirth, the Hurricane Games owners were able to buy all the necessary games and equipment for the business, and the new arcade opened its doors last month.

Financing with Wirth "gives the business owner the opportunity to keep their other lines of credit available to run the business," said Curt Cavins, the franchise owner of Wirth Bustness Credit in the Jacksonville area. Wirth is a subsidiary of Winmark Corp., which also operates other companies such as Play It Again Sports, Once Upon A Child and Plato's Closet.

Cavins also points out that leasing equipment through a company such as his helps strengthen the business's credit position because it's establishing credit in the business's name.

In the midst of this credit crunch, many entrepreneurs and small businesses might consider taking out a second mortgage or maxing out their credit cards if they can't secure more traditional credit through a bank. Cavins said anecdotally, he's hearing that some of those options are becoming fewer and farther between as credit lines shrink and home values decrease.