January 29, 2010, 12:00 AM

Top priority: the bottom line

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The couple`s business, selling baby carriers that Elizabeth designed, generated sales of $15,000 in its first year, $575,000 in 2008 and over $1 million last year when about half its sales were online at SleepyWrap.com and the rest through wholesalers.

"To feed the growth over the last two years we needed capital," Robert Antunovic says. "Last year, we went to banks and they told us basically there was no chance you can get any money, although we already had revenue."

The couple initially turned to Elizabeth`s stepfather for a five-year $50,000 loan. But they needed more money last year for prototypes of new products and for inventory—especially since suppliers were requiring 100% payment in advance, instead of 50% before the credit crisis hit.

Antunovic says it`s been hard to get bank loans because the e-retailer has little credit history. He did get a bank to okay a loan last fall, but the lender required approval from the U.S. Small Business Administration that has yet to arrive.

Seeking alternatives to banks, Robert searched the Internet and found On Deck Capital. On Deck, which launched in 2007, is one of a number of venture capital-backed companies that have arisen in recent years and that take advantage of the greater availability of business data via the Internet to lend to small companies that banks typically turn down, says Mitch Jacobs, CEO of On Deck. For instance, the lender can, with permission, view a borrower`s online banking account to verify receipts, he says.

Jacobs concedes On Deck is a more expensive option than traditional lenders. The typical interest rate varies from 18-36% when origination costs are included, he says. And Nap had to begin paying back the loan immediately, paying On Deck $250 daily.

Despite the struggle to attract financing, Nap Inc. has progressed beyond the baby-step stage and is growing. But there may be fewer such newcomers to e-retail until the credit crunch eases.

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