Description: Ivan Rincon’s products may have been skimpy, but he was convinced his growth prospects were not. Orchid Boutique, the online swimwear shop he founded six years ago in Miami with his wife, Mayra, was approaching $3 million in annual sales. It had been profitable since 2010, he said, with margins that ran between 10 and 15 percent. But the business was highly seasonal, leaving him scrambling for cash in the off-season when he needed to place orders.
Date: Mar 04, 2014
Questions for discussion:
- Describe the cash flow problem facing the firm?
- Why would banks be reluctant to offer financing?
- What are the risks for these alternative financing firms?