Getting a Bank Loan For Your Mary Kay “Business”
One sales director is suggesting that new Mary Kay consultants use this letter to get a bank loan. Yes, she’s suggesting that the consultant actually present this nonsense to a bank loan officer. I’m afraid to say that this isn’t quite going to cut it.
To: Loan Officer
Business Proposal
I recently became a Mary Kay Independent Consultant and I am applying for a Small Business Loan to get started. Mary Kay is the best selling brand of facial Skin Care and Color Cosmetics in the U.S. and is the largest Skin Care Company in the United States.
Mary Kay Inc., provides women with an unparalleled opportunity for financial independence as well as career and personal fulfillment. As an Independent Consultant, I will conduct weekly Skin Care Classes. These classes will generate an average of $400.00 in weekly revenues. To get off to a good start, I must have sufficient inventory. The purpose of this loan request is to purchase sufficient inventory.
Inventory Package and Use:
Career Package $3600.00
(foundations, color cosmetics assortment and fragrance items)Office Supplies $150.00
(postcards, stamps, folders, cabinet, desk, etc.)Business Supplies $150.00
(literature, order forms, sales tickets, display trays, vanity tray/mirrors, brushes, sponges, product samples)Tax on Inventory $500.00
Total amount needed to start my business $4,400.00
More products are sold in a Skin Care Class when they are available to the Customer. Women prefer to take their product home as opposed to having them delivered later. Having products on hand will increase sales and related revenue. All income from this Business will be maintained in a separate bank account. Money earned from the related sales of this inventory will be earmarked to payoff this loan and reinvest into my business.
Thank you for understanding this application request.
Respectfully,
xxxx xxxxx
Visit the
Oh, but he or she WON’T understand that application for a loan. Because…..it’s not an application. It’s a letter. Pretty sure all the auto loans and house loans I’ve gotten in my life never accepted a letter in lieu of a credit check and actual application.
$4400 would get you about 10 classes at our local community college–a MUCH better investment in yourself than a Mary Kay inventory. The tax on that inventory alone would cover a class.
Wow, Queen, that puts it in perspective! You are MUCH better off putting that money into your education. Just…wow.
Years ago I tried to get a very small loan for MK. (around $500.00). The bank wouldn’t even consider it (even though I was getting a small pension) had no debt and my husband had a good salary. I am now glad the bank knew this was not a real business. I was quite upset at the time but it was actually a blessing in disguise. It just shows these directors are so brainwashed, they are out of touch with reality.
Oh well, that was painful to read. The letter alone displays someone who is not business savvy. When applying for a business loan you need a business plan with statistics, facts not basic opinions like “Mary Kay is the best….” My oh my. This just keeps getting worse and worse.
EXACTLY! You need to present a well structured business plan with market research. You know what is the saddest part? I know a Kaybot who actually has a Business Degree from University of Colorado and has been waiting to become an SD for 13+ years. How do you explain that one??? Didn’t she learn in business school the ABC’s of starting a REAL business? the term “business plan” is drilled and repeated over and over for at least 4 years. Any decent college will have you create your own business so you follow the actual steps of putting an entreprenourial idea into motion. All i can think is she slept through class and
EXACTLY! You need to present a well structured business plan with market research. You know what is the saddest part? I know a Kaybot who actually has a Business Degree from University of Colorado and has been waiting to become an SD for 13+ years. How do you explain that one??? Didn’t she learn in business school the ABC’s of starting a REAL business? the term “business plan” is drilled and repeated over and over for at least 4 years. Any decent college will have you create your own business so you follow the actual steps of putting an entrepreneurial idea into motion. All i can think is she slept through class and WHAT A WASTE OF TIME AND MONEY!!!
Ah, yes. My director had a loan officer at a bank offering 0% interest loans. So I applied for one and got it for my ruby order. Then a couple months later, this loan officer was fired and I was given two weeks to pay off my loan in full. And hence, the beginning of my debt with MK…
I work for a nonprofit that, among other things, loans money to small businesses.
– Most banks, these days, won’t do a loan for much under $75k, in our experience working with our clients. Anything under that amount, they will pitch the person on either a credit card or a home-equity loan.
– We do lend amounts that small, but for a start-up business we require:
– A projected 12-month cash flow statement
– Completion of OUR loan application
– A business plan – doesn’t have to be 100 pages long, but needs to explain how the person is planning to make the business successful. (We can help people do a business plan and cash flow projection if they want to work with us – what we find with most MLMers is that they aren’t willing to put the work in.)
– A credit check
We rarely lend to people doing MLM businesses like Mary Kay because when they get guidance from their “higher ups” on how to do the cash flow statement or business plan, they’re told “that’s not necessary” or are actively discouraged from completing the paperwork. The “upline” people don’t want the new “consultant” looking too closely at the numbers, or doing too much market analysis, as they’ll figure out pretty fast there’s no way to make the business work. No paperwork, no loan; so. There you go.
This “letter” might get you a call back from a CSR at a bank, who will push you to apply for one of their credit cards (if they think you’re credit eligible). But it won’t get you a loan.
The first time I tried to join Mary Kay, they asked me for almost 1,500 dollars just for the first order and inventory. Where I am from, this is the minimum to join the company. But they want to be paid as soon as possible. Is like two years and even when I have seeing like another three consultants, and nobody tells me if MK has some kind of credit (like Avon, you make your order and have 21 days to pay it).
They lied to you, there is no minimum to join the company other than purchasing your starter kit. You are then required to make inventory purchases only if you choose to remain active.
Career package $3,600. That’ll get you applauded for selling an AWESOME $7,200.
At the typical sales rate of less than $400 a month, you MIGHT really sell a sixth of that before you go inactive and need to place another order. If you’re really really lucky you might sell half of it before it gets discontinued.
But you can congratulate yourself for making your Director’s caddy payment during your fist month.
Does that sound too cynical?
This delusional piece of propaganda is more designed to trick the consultant into thinking she’s doing something legit, than it ever will be for purposes of securing inventory financing. And once again, we have more proof that the Sd’s rarely ever do or use the “training info” they disseminate to the ranks, or they’d KNOW it wont work!
Cindilu said it best…”Out of touch with reality”.
Picture a consultant marching off to their local First National, and getting shown the door. No problem! That banker is just another negative nellie who “doesn’t get it” .
Women prefer to take their product home as opposed to having them delivered later.
So she’s going to keep the entire $7,200 inventory in her car trunk for immediate delivery? As if it will fit… and never mind the car temperature… That’s what she’s saying.
She’d better add $40,000 to that loan application for a climate controlled pink van, and the fuel to keep it running, so she can get that extra $27.50 in immediate delivery product sales.
I was recently hit up by a MLM pusher at my church (she was selling Level Thrive patches/shakes/potions crap). She is my bible study teacher, I am new at the church, and it took me a few days to catch on to what I was getting roped into. Needless to say, but the time I got up the courage to kindly tell her no, it appears she no longer wants to give me the time of day. This recent experience reminded me of something that happened to me 20 years ago at a small baptist church I was attending. I was in a very needy state. My husband was physically abusive (VERY physically abusive) and I had turned to this church for help. The pastor was helpful, but then I got invited over to their house for a makeover. Poor gullible needy innocent young 20-year-old me trotted over there……feeling ultra needy because of my domestic violence situation…….and you know what that pastors wife did? She tried to set me up as a Mary Kay salesperson. She called the local bank and arranged for me to go down there and meet with someone (to apply for my “loan”). Thank goodness I was denied the loan. And of course once I was , pastors wife dropped me like a hot potato. MLM’s in the church are evil, evil, pure evil.