Small Business Profile: More to Love
Credit cards allow founder Rachel Estapa to travel to events, make larger purchases and automate payments
Erica Sandberg is a prominent personal finance authority and author of “Expecting Money: The Essential Financial Plan for New and Growing Families.” She writes “Small Business Credit Profiles,” a weekly column featuring small business owners' journey with credit and credit cards for CreditCards.com.
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Rachel Estapa, a certified Kripalu yoga instructor and transformational life coach, doesn’t just believe in body acceptance – she’s turned it into a successful company.
Estapa founded More to Love, a Boston, Massachusetts yoga studio that embraces people of all sizes. Each person who enters is empowered to not just care for their physical self, but their mind and spirit as well.
“I’m passionate about empowering people to love and appreciate their bodies,” says Estapa. “My path to body acceptance began many years ago. I challenged myself to try yoga – something I always thought was not made for my body type. I was amazed to find that, when I give my body the support and respect it deserves, yoga is an incredible tool in learning how strong and capable my body truly is.”
In fact, the More to Love studio is so revolutionary in concept and execution that Estapa won the Mastercard and Bank of America’s Grow Your Biz Contest Grand Prize in 2017.
Along with a great credit rating and a powerful piece of plastic, Estapa is making sure her yoga flow is flowing for all who enter her special space.
See related: Small Business Profile: Erin Pelicano Jewelry
How did your credit history affect the way you financed your venture?
Thankfully, I had a good credit score to begin with. Personally, I only had one credit card and have never been late on a payment. I learned early in life, as I lost my first professional job in 2008 at 23, that you've got to be smart with your money and that includes managing credit cards. I have a student loan that I’m paying off, so I wasn't interested in getting into more debt on non-important things.
With More to Love, I got my first credit card for the business about two years into the venture. It was after I knew I would be able to repay everything I charged. I got the card from a small local credit union, and the credit limit was $7,000.
Then when I had the opportunity to get a credit card with Bank of America, I jumped on it. It’s the Bank of America® Business Advantage Cash Rewards Mastercard® credit card. My initial credit line was small – $3,500 – but I paid it on time and proved I could use it wisely. Within a few months they increased the limit to $10,000.
I love this card and chose it because I had a great relationship with my banker. She talked about my needs and advised me that this was the best card for me. She was right. I love the rewards [3 percent cash back at gas stations and office supply stores on up to $250,000 in purchases per year, 1 percent thereafter; 2 percent cash back at restaurants and 1 percent cash back on other purchases] and get a lot of cash back just for doing the everyday things in a business – especially the coffee perks!
What are you doing with the points you’re racking up?
Right now, I'm saving up the cash rewards for a little bit. I treat the balance as I would a new savings account. The cash I earn is growing with me and the business. I might use it for a nice meal out or reinvest some the cash into the business. It's nice to be able to have options and I’m still deciding!
Tip: Business credit cards can provide flexibility and a slew of perks, but they are not for everyone. Read "Does your company need a business credit card?" to learn more.
How are credit cards helping you and your business become successful?
More to Love's growth would not be possible without my credit card. It's that simple. With the card I can travel to events, make larger purchases, keep things automatically paid without having to manually track everything. It's been a game changer for me and my business.
If anything, the credit card helps take mental energy off worrying about money because I know I have a system in place with the credit and cash flow that will work for me.
What lessons have you learned about borrowing money along the way, and advice for other entrepreneurs?
Of course, I made some mistakes. For example, I hit my limit earlier than I had planned to, so I needed to make some adjustments on the business end to ensure things didn't go off track. This is when I started to understand the importance of cash flow. I consider mistakes as teaching opportunities.
My advice for other small-business owners is to charge only the amounts that you will repay with hard work. Borrowing money isn't bad, but it will cause you stress when your borrowing isn't aligned with your actions. So, you have to think, plan, and really forecast how the money you borrow from a credit card will advance your goal. If you cannot answer that, no amount of money you borrow will make a positive impact. It will only stress you out and possibly damage your future ventures.
Also, don’t think you have to start with a huge line of credit. It’s OK to start small, even $500 can help. It’s a start. If you manage that figure well, it will lead to larger amounts. I think of credit as a tool, not as a golden ticket. That mindset keeps me focused and making smart choices in my business.