How are you financing your store operations? Has the process become easier or more difficult lately?

I haven't borrowed since my initial investment in 1978. Sales have steadily increased, which has enabled me to operate without borrowing. So in that sense, it's much easier, as I've been able to put my profits back into the business. In the beginning, I had several part-time people working for me and didn't have to pay a major salary. About 1985, I paid off the initial investment and was able to afford to pay salaries. From then on it's been steady growth, and since 1990 things have really gone well. We incorporated furniture into our merchandise mix, which enables us to have larger ticket items and not be dependent on just the gift business. Our interior design business also really took off because we are able to travel outside this area to work with clients.

We did all of our financing recently. In the old days I had to finance the business on my credit card, which you shouldn't ever do because when you go to apply for another loan, you're carrying all this debt. About two years ago we started going through the process of getting an SBA loan; we have a terrific relationship with our bank, but it still took forever. There was such a huge pile of paperwork that the next time we decided it was easier to just call American Express. Within five days I had a line of credit. We didn't actually need the credit line, but figured we'd better set it up because someday our building will have to come down and we'll need all we can get. What was very difficult a number of years ago has become very easy. It's probably because of the growth of our business. Or maybe we just got lucky.

Probably it's easier to finance now. There are so many credit card companies sending promotions that sometimes I've used them. They're even doing zero percent financing for a year, so I've moved money around to minimize interest on existing financing. We did go to the bank for financing for our fixtures and inside renovations. Unfortunately that was at 10 percent, since we signed the deal just as interest rates peaked. We paid that off by refinancing our house with a second mortgage at a much lower interest rate of prime plus 1.5 percent. At the time we signed that was 5.5 percent. Now it's gone up three quarters of a point, but it's still a lot better. Other than that we haven't gone back to the bank except for our existing line of credit that we've had since we started.

We live in a community that's relatively small and we've kept up a good relationship with a number of banks in town. I think they're all trying to play their part in revitalizing our area, and so when they see something they think is a good investment they're eager to work with us. When we started, we got a loan from the Small Business Administration (SBA), which on the one hand was helpful, but on the other hand was more work than we ever anticipated. So now when we need something like a short-term loan for Christmas inventory, we just go through our local banks. They've been very helpful. We own our buildings and that's what we used the SBA loan for.