Perfect Tux founder, Steve Burton, was able to successfully launch and grow Perfect Tux using personal savings and credit cards, but the highly seasonal nature of formalwear presented issues for growth. Prom season is Perfect Tux's peak time of year, but tight cash flow in the slower months meant Perfect Tux wasn’t able to make the necessary investments to capture that demand.
Perfect Tux needed working capital to expand its marketing efforts, purchase inventory, and streamline operations, but traditional bank loans weren't an option. Most banks had a two year minimum history requirement, which Perfect Tux didn’t qualify for at the time despite substantial growth. Banks weren’t equipped to evaluate a fast-growing ecommerce business like Perfect Tux.
Perfect Tux decided to explore financial options through Stripe Capital. Stripe Capital's multiple offer options meant Perfect Tux could choose a lower repayment rate that wouldn't cripple its cashflow during slower months. "The option to choose a low repayment rate with Stripe Capital was a gamechanger for me—I didn’t have to worry about not making payroll," said Burton.
With an advance from Stripe Capital, Perfect Tux was able to purchase additional inventory and invest in several marketing campaigns in preparation for its busiest quarter. Perfect Tux also invested in new photos and videos to better showcase its products on the website.
The investments paid off—that year, Perfect Tux achieved its best peak season ever. Perfect Tux is now on its second advance with Stripe Capital, which is being used to hire resources to fulfill a growing volume of orders and prepare for an even busier upcoming prom season than last.
Without Stripe Capital, we wouldn’t have been able to invest in the marketing that’s critical to converting customers. We had our best peak season ever this year, and access to financing was a big part of that.