Post by Liz Cullen, contributing Women On Business writer
I recently went to a program put on by the Maryland Chamber of Commerce which linked small business owners with sources of capital. It was “speed dating” for business owners to find out who was still lending and the opportunities that are available with different banks. My last post discussed how in polls, women business owners were optimistic about 2010 and given the number of lenders in the room who were actively looking for small business owners, it seems that they are optimistic, too. In fact, many of the lenders I spoke to were frustrated by the perception that banks are not lending. As someone who works with entrepreneurs, this was encouraging and I took away some lessons to share with the businesses I work with:
1. Get to know your banker.
Each of the lenders I spoke to, from community banks to regional banks to large national corporations, stressed that the businesses that were the most successful treated the banks as partners to the business, not merely service providers –and vice versa. This goes for attorneys, CPAs, and any company that provides a critical service for your business. One woman who worked for a community bank mentioned that often small business owners lose sight of the fact that they are the client.
2. If at first you don’t succeed, try, try again.
One speaker used Christopher Columbus as an example of someone who was rejected for years before he succeeded in obtaining funding for his venture. This lesson also builds on lesson number 1. Securing capital for your business is a process; developing relationships and finding a good fit is the first step in that process but it may take several presentations and plans before opening that line of credit or finding capital for new equipment.
3. Don’t believe the hype.
Undoubtedly, the economy has affected the amount, rates, and frequency with which banks are lending money. The key elements that banks consider when evaluating whether or not to lend to a company, however- capacity, capital, collateral, conditions, and character- have not changed. Once you’ve built a relationship with your “banking partner,” they can help you realistically evaluate these items and determine whether you fit the profile of companies they are seeking.
The final lesson I took away was get out there! Women entrepreneurs were underrepresented at the event I attended, despite the fact that women are starting businesses and employing more people at much faster rates. I often hear that women are risk averse and do not like to take on debt, which can slow the growth of their companies. Given the women business owners I know and work with – I don’t believe that hype.