Good credit but no cigar

Yesterday I talked a little about the business plan and the financial/credit report. Both are extremely good documents to complete and update from time to time, just to keep us honest, and our motives clear. What is a little disconcerting is the fact that no matter how good the credit score, this does not alleviate or substitute for a lack of what is called liquid assets. Here is what I learned: Don and I have a great credit score--we should; we have been plugging away at eliminating debt, paying down credit cards at more than the minimum payment, and limiting spending as much as possible, using cash for necessities. However, when we look at moving into a permanent building through a lease, we have to consider the very concrete "move in costs."

First there is the security deposit and the first month's rent (about $6k). We also have to buy a sign and have it installed to the tune of approximately $3k. Then we have to figure in fixtures and displays--even though we can use our current furniture, we have to fit in the parameters of the individual building. Add to that a security system, utilities, a new CO (certificate of occupancy), a sign fee from the city of Garland (they get you coming and going), phone and cable if necessary, and a variety of other little things I am sure we have not even thought about yet.

What this means is that despite all the money we have saved and all the things we bring to the table otherwise, without at least $10,000 to start, we cannot even think about moving in today's commercial market. I refuse to refinance our home or take out a personal loan just to make this work. On the upside, the Simon property we are negotiating for and waiting for the contract on does not require either a deposit or move in fee. We do still have to get a CO, a sign and a utilities sign-off, but those are minor in the grand scheme of things. With a two-year contract, we can revisit a move in the not-so-distant future.