Seven U.S. presidents ran small businesses before they ran the country: Harry Truman (a Kansas City haberdashery), Abraham Lincoln (a New Salem general store), George Washington (a Mount Vernon whiskey distillery), Warren G. Harding (the Marion Star newspaper), Andrew Johnson (a Tennessee tailor shop), Jimmy Carter (a peanut warehouse), and Herbert Hoover (a mining-engineering consultancy). Some built durable, cash-generating operations; others were buried by inventory they bought on credit and could not sell. Read as an underwriter would read them, their stories are a clinic in the one thing that decides whether a small business survives: cash flow, not credit score.
Key takeaways
- Seven U.S. presidents ran small businesses before office: Truman, Lincoln, Washington, Harding, Johnson, Carter, and Hoover.
- Truman's Kansas City haberdashery and Lincoln's New Salem store both failed after buying inventory on credit into falling demand — a timing and cash-flow problem, not a character one.
- George Washington's Mount Vernon distillery was among the largest in America by 1799, turning estate-grown grain into a high-margin, sellable product.
- Warren G. Harding rebuilt a failing Ohio newspaper into a profitable daily, and Herbert Hoover built a large international mining-engineering business.
- The businesses that lasted sold repeat-demand products and converted inputs to cash faster than bills came due — the core of modern underwriting.
- Revenue-based and MCA marketplace funding underwrites on bank deposits and revenue over credit score, works with FICO 500+, and often decides in 24-48 hours.
- Funding on a revenue-based marketplace commonly starts around $10,000 and is sized to real cash flow; no responsible funder calls approval guaranteed.
The 7 presidents and the businesses they actually ran
These weren't ceremonial side ventures. Each man carried the operating risk himself — he owned the inventory, signed for the space, and lived on what the business could throw off after expenses.
- Harry S. Truman — Truman & Jacobson haberdashery (Kansas City). Opened in 1919 selling shirts, hats, and men's furnishings. It ran a few good years, then a sharp postwar downturn crushed retail demand and the store closed, leaving Truman with debt he spent more than a decade repaying rather than declaring bankruptcy.
- Abraham Lincoln — the Lincoln-Berry general store (New Salem, Illinois). Bought largely on credit in the early 1830s. Foot traffic never covered the note; his partner drank the profits and then died, leaving Lincoln with what he called the "national debt" that took years to clear.
- George Washington — the Mount Vernon distillery. By 1799 it was one of the largest whiskey distilleries in the country, running five stills and turning grain the estate already grew into a high-margin, sellable product — vertical integration before the phrase existed.
- Warren G. Harding — the Marion Star. Harding and partners bought a failing Ohio newspaper for a few hundred dollars and rebuilt it into a profitable daily. It was the rare presidential venture that made its owner genuinely well-off through operations, not inheritance.
- Andrew Johnson — a tailor shop (Greeneville, Tennessee). A self-taught tailor who opened his own shop, employed workers, and used the steady trade income to buy property and fund his early political climb.
- Jimmy Carter — Carter's Warehouse (Plains, Georgia). A seed, fertilizer, and peanut-buying business Carter took over and grew. It was seasonal and weather-exposed — a single drought year could wipe out a season's margin.
- Herbert Hoover — an international mining-engineering consultancy. Hoover built a genuinely large professional-services and investment business across several continents and became wealthy before entering public life.
What their wins and failures teach about cash flow
Line the seven up and a pattern appears that any modern lender would recognize instantly. The businesses that failed — Truman's and Lincoln's — both bought inventory on credit into a demand cliff. The businesses that lasted — Washington's distillery, Harding's newspaper, Johnson's tailor shop — sold something with repeat demand and turned inputs into cash faster than the bills came due.
That is the entire underwriting question, then and now. Not "is this a good person" (Lincoln and Truman were about as creditworthy in character as Americans get), but does money come in faster than it goes out, and is that inflow steady enough to service an obligation? Lincoln's store failed on a timing mismatch, not a moral one. Truman's failed on demand risk he could not have priced. Modern owners hit the exact same walls: inventory bought ahead of a season that softens, a slow-paying customer base, a fixed note against a variable top line.
The practical lesson is that bank deposits and revenue tell the real story of a business faster than a credit bureau does. A FICO score is a rear-view mirror on personal borrowing. A deposit history is a live feed of whether the business actually works. That distinction is why a whole category of small-business funding now underwrites on revenue first — and why an owner with a bruised score but healthy deposits is not the dead end a 1920s banker would have called Truman.
How a modern lender would have read Truman's numbers
Picture Truman & Jacobson walking into a revenue-based funding review today instead of a 1921 bank. The banker of that era looked at collateral and character. A revenue-based reviewer looks at the last several months of business bank statements and asks a different set of questions.
| Underwriting factor | Old-school bank (1921) | Revenue-based / MCA marketplace (today) |
|---|---|---|
| Primary signal | Collateral and personal reputation | Monthly deposits and revenue consistency |
| Credit score | Effectively pass/fail | Considered, but FICO 500+ can still qualify |
| Decision speed | Weeks, in person | Often 24-48 hours |
| What kills the deal | No hard assets to pledge | Thin, erratic, or shrinking deposits |
| Best fit | Asset-heavy, stable buyer | Revenue-generating operator who needs speed |
The point is not that modern funding would have saved Truman's store — a demand collapse is a demand collapse. It is that a revenue-based reviewer would have caught the softening deposits early and either sized funding to the real cash flow or declined it, instead of extending inventory credit that the top line could no longer support.
A realistic example: seasonal cash gap, funded on revenue
Consider a modern echo of Carter's Warehouse — a seasonal ag-supply business, strong spring and summer deposits, a thin winter. The owner has a 540 FICO from a rough prior year but consistent, verifiable revenue. Here is how a revenue-based marketplace might frame the options (illustrative only; figures shown are for example, not a quote):
| Situation | For example | Why revenue-based fits |
|---|---|---|
| Monthly business deposits | ~$40,000-$60,000 | Consistent inflow matters more than the credit score |
| Personal FICO | 540 | 500+ can still be workable when deposits are healthy |
| Funding need | Pre-season inventory buy | Timed to the ramp-up, repaid as sales come in |
| Minimum funding | From ~$10,000 | Sized to real cash flow, not a fixed loan grid |
| Speed to decision | 24-48 hours | Beats the season instead of missing it |
Because repayment on a revenue-based advance flexes with a slice of daily or weekly sales rather than a fixed bank-note payment, the winter softness that would have broken a rigid amortization schedule is absorbed by the structure. That is the modern answer to Carter's weather risk and Truman's demand risk: match the obligation to the cash flow, not the calendar.
Decision framework: when this kind of funding fits — and when to avoid it
Revenue-based funding and merchant cash advances are tools, not cures. Used against the right cash-flow situation they solve a timing problem; used against the wrong one they deepen it. Here is the operator's cut.
Works best when:
- You have steady, verifiable deposits but a credit score that undersells the business (FICO 500+).
- The need is time-sensitive and revenue-producing — inventory ahead of a proven season, a bulk-buy discount, equipment that lifts throughput, filling a receivables gap.
- You need speed a bank cannot match — a decision in 24-48 hours instead of weeks.
- The funding is sized to real cash flow (from about $10,000) and you can see the sales that repay it.
Avoid when:
- Deposits are thin, erratic, or shrinking — that is Truman's postwar cliff, and more money will not fix a demand problem.
- You would use it to cover an ongoing operating loss rather than a specific, revenue-generating gap.
- You are stacking it on top of existing advances without a clear cash-flow cushion to service everything.
- A slower, lower-cost option genuinely fits your timeline — if you can wait for a bank or SBA product, price it out first. See our revenue-based financing guide and merchant cash advance explainer for the full comparison.
No responsible funder should ever call approval "guaranteed." The honest framing is that revenue-based review gives a fast, deposit-driven yes-or-no — and a fast, well-reasoned no is worth more to an operator than a slow maybe.
The through-line from Washington's distillery to Main Street today
Washington's distillery is the model case. He already grew the grain; distilling turned a raw input into a shelf-stable, high-demand product he could sell for cash. That is a business generating and recycling its own working capital — the healthiest position an owner can be in. Harding's newspaper and Johnson's tailor shop did the same on a smaller scale: repeat demand, quick conversion of work into cash, obligations they could service from operations.
Most small businesses do not start there. They start where Lincoln and Truman did — needing to buy the inventory or the equipment before the revenue exists to pay for it. The difference between a New Salem-style failure and a Mount Vernon-style durability is rarely the owner's grit. It is whether the funding used to bridge that gap is matched to the cash flow, priced honestly, and sized to what the deposits can actually carry. That is the entire job of modern revenue-based underwriting, and it is why a bruised credit file no longer ends the conversation the way it did in 1921.
Frequently asked questions
Which U.S. president had the most famous small-business failure?
Harry Truman is the best-known example. His Kansas City haberdashery, Truman & Jacobson, opened in 1919 and closed within a few years when a postwar downturn gutted retail demand. Truman spent more than a decade repaying the debt rather than declaring bankruptcy. Abraham Lincoln's New Salem general store failed earlier and left him with what he called his 'national debt.'
Did any president build a genuinely profitable business?
Yes. George Washington's Mount Vernon distillery became one of the largest in the country by 1799. Warren G. Harding turned a failing Ohio newspaper, the Marion Star, into a profitable daily. Herbert Hoover built a large international mining-engineering business and became wealthy before entering public life. All three succeeded on repeat demand and fast conversion of inputs into cash.
What do these presidents' businesses teach modern owners about funding?
That cash flow, not credit score or character, decides survival. Lincoln and Truman were creditworthy people whose businesses failed on timing and demand risk. The durable ventures sold something with repeat demand and turned inputs into cash faster than the bills came due. Modern revenue-based underwriting reflects that lesson by reading bank deposits first.
How is revenue-based funding different from a traditional bank loan?
A bank leads with collateral and credit score and can take weeks to decide. A revenue-based or MCA marketplace leads with your monthly deposits and revenue consistency, can work with FICO scores of 500 and up, funds from around $10,000, and often returns a decision in 24-48 hours. Repayment typically flexes with a slice of sales rather than a fixed monthly note.
Can I qualify with a low credit score?
Often, yes. Revenue-based reviewers weigh consistent, verifiable business deposits more heavily than personal FICO, and many programs consider applicants at 500+. A steady deposit history can offset a bruised score. It is never guaranteed, though — thin, erratic, or shrinking deposits will still lead to a decline, because that signals a demand problem more money cannot fix.
When should a business avoid a merchant cash advance?
Avoid it when deposits are thin or shrinking, when you would use it to cover an ongoing operating loss rather than a specific revenue-generating gap, or when you would be stacking it on existing advances without a cash-flow cushion. If a slower, lower-cost option like a bank or SBA product genuinely fits your timeline, price that out first.
What is the minimum funding amount for revenue-based financing?
On a revenue-based marketplace, funding commonly starts around $10,000 and is sized to your actual cash flow rather than a fixed loan grid. The amount you qualify for is driven mainly by the strength and consistency of your business deposits over recent months.
Why do lenders look at bank deposits instead of just credit scores?
A credit score is a rear-view mirror on personal borrowing history. Bank deposits are a live feed of whether the business actually works — how much comes in, how steadily, and whether it can service a new obligation. As the Truman and Lincoln failures show, good character does not guarantee a healthy cash cycle, so deposits tell the real operating story faster.
