|
There
are 9.1 million women-owned firms in the U.S. employing
over 27.5 million people and generating over
$3.6 trillion in sales.
1999 – National Foundation for Women Business Owners
The
Women Entrepreneurs’ Connection
A
study by the National Foundation for Women Business Owners in
1999 found that women-owned firms accounted for 38% of all firms
in the United States and that companies run by women are more
likely to remain in business than the average U.S. firm. With
statistics like that why is it is still difficult to get the
financing to start? Part of the formula often missing for many
going into business, is the lack of expertise in making business
decisions and creating a business plan. That thought comes from
Laura Mason who is the Vice President of The Women
Entrepreneurs’ Connection – a division of Fleet Bank
dedicated to providing resources to women business owners.
“Based
on research from the national foundation it came to light that
women operate their businesses and make their decisions very
differently from men,” adds Laura. She says women mostly base
their decisions on referral, relationship and feeling
comfortable. Women also don’t traditionally like to take risk
as much as men and Laura adds, “…they’ve always been told
that debt is a bad thing and its really deterred them from
actually finding additional resources to help their businesses
grow.”
Laura
claims often first time women business owners don’t have a
clear understanding of the
process of seeking the financial support to start-up, and
that’s where she says the Connection will come in for clarity.
She believes that the educational seminars on banking will help
prospective women business owners get a handle on where they
stand financially and where they need to be to qualify for a
bank loan.
Fleet’s
program is designed to help business women form strategic
alliances with other firms, provide business resources and a
team of successful business women. But the bottom line is
dollars. And in order to get a loan you must have the credit to
back up that loan.
The
Quandary of Securing Small Business Loans for Women
“You
must have collateral, it will be an issue.” That’s what
Roslyn Goldmacher says about securing loans or venture capital
for your start-up business. Roslyn is the Executive Director of
the Long Island Development Corporation which offers money and
technical assistance for small business. It is after all the
nature of the beast. Cash is king.
Goldmacher
says, “If you look at the types of businesses women are
starting up, they are service oriented; such as public
relations, marketing, motivational speaking, not the type that
venture capitalists would get involved in.” Obtaining a small
business loan is one of the ways to get started. But it appears
an unattainable goal for homemakers, because in many scenarios
they are not the key household breadwinner.
Building credit becomes a chore in itself. Little or poor
credit can make getting a loan virtually impossible to get, but
there are methods to help create a base for credit, and a
foundation to secure funding.
“A
lender wants a very good business plan backed up by solid
projections showing an ability to repay a loan” adds
Goldmacher. And that means asking for help in creating that
plan. Long Island Development Corporation holds workshops and
seminars to help women-business owners in all the elements of
owning and running a business. The LIDC’s Long Island Small
Business Assistance Corporation (LISBAC), may lend from two to
ten thousand dollars to a women-owned start-up. And Roslyn says
to keep in mind that a start-up is defined as a business under
three years old because, “while the first year is generally
the highest risk for failure, lenders also consider the
following two years to be risky.”
Roslyn’s
Fundamentals of Financing:
Springboard
2000
Venture
Capital for Women-Owned Businesses
Currently
women receive less than 3% of all venture capital investments.
“Springboard 2000 is a national initiative to accelerate
women's access to the equity markets as both entrepreneurs and
investors.” Springboard 2000 website, Silicon Valley,
Washington, DC and Boston were the sites of a series of venture
capital forums showcasing women entrepreneurs. The National
Women's Business Council joined with regional
entrepreneurial service organizations, key technology partners
and sponsors, to create these forums which fostered investments
in women-founded and women-led businesses.
This
forum allowed women entrepreneurs to present their business
plans to venture capitalists. Springboard 2000 has raised
hundreds of millions of dollars targeted for supporting these
businesses and helping them to grow into financially successful,
competitive companies. You
can find a wealth of knowledge on how these conferences work and
check out some of the success stories by logging onto their
website. (See related links)
There
is an on-line application process and if you quality you’re
asked to participate in the Springboard conference. In various
sessions they train you to present your companies business plan
to venture capitalists. They will go over your business plan and
help to modify it if need be. The next Springboard conference in
scheduled for Spring of 2001.
Small
Business Administration
The
Small Business Administration offers loans and has several
women’s business centers which provide assistance and/or
training in finance, management, marketing, procurement and the
Internet. You can also get information on home-based business
and other issues relating to women in business. All provide
individual business counseling and access to the SBA’s
programs and services; a number are also intermediaries for the
SBA’s MicroLoan and Loan Prequalification programs.
(see related links)
|
