Credit Management

My experiences with business credit

Greg Cole, co-owner of California-based pumpkin and Christmas tree retailer Seasonal Adventures, talks about the role credit has played in managing his business finances.

Published: October 23, 2019

Wells Fargo Works: As an owner of a seasonal business, what does your approach to credit look like?

Greg Cole: Because our business is so seasonal — we’re open for 30 days for pumpkins, and then four to five weeks for Christmas time — we’ll have nice revenues for a couple months, and then sit dormant the rest of the year. And the goal has always been to be debt-free for most of that downtime. So Wells Fargo’s credit lines are structured perfectly for us, because we need to front-load money to pay for all the rents and all the work that we do in the off-season. Generally, we start borrowing around June, and then pay it back in the third week of October.

WFW: What are the key considerations you keep top of mind when taking on debt?

Cole: I’m pretty comfortable taking on debt. At this point, we kind of know when to borrow. But generally, we aim to avoid being in any longterm debt. The number one goal is to be able to pay it back over a short period of time. Because if it rains the busy weekend of Halloween, that’s 20 or 25% of our business. The year is gone, and we don’t have any ability to recover. It’s also helpful to spread our exposure. We were originally just in southern California, but now we have lots in Las Vegas, a lot in Boise, and one in Albuquerque. So even if we get rain in Las Vegas, we still have income from other areas. So just spreading our risk has been important to keeping the business healthy.

WFW: How have the credit products you use helped you grow your business to where it is now?

Cole: We have two credit products with Wells Fargo: a loan on the office building that we own, and a line of credit. Having that credit totally facilitated our ability to grow and increase the business over the last few years. Before we had access to money to buy equipment, we had to use our own equity lines — and at best, we would have maintained the size of our business, if not gone backward. But now, we own our equipment free and clear. And the credit line has been the thing that has allowed us to do that.

WFW: As you keep growing and changing your business, what role will credit play?

Cole: We can see ourselves maybe five years from now being strictly in the pumpkin business — maybe keeping a couple of Christmas tree lots — because that’s where the growth is going to be. So we create a game plan for what we want to spend, how we want to grow, and we know that that growth would probably cost us $200,000 to $250,000 in equipment. Then we’d need to increase our line of credit, and would come to Wells Fargo’s door.