Six months after starting her secretarial business, Carol Birkey applied for a $5,000 business loan.
She had $80,000 in equity in her home and didn’t expect any problems. She was wrong.
Birkey applied at five banks, waited a minimum of a week and was turned down each time. One of the things that bothered her most was being talked to “as if I were 12 years old,” she said.
Networking eventually led her to a bank that, within a day, approved a $20,000 line of credit for her business, Administrative Services in Liberty, Mo.
Birkey’s experience is not unusual, according to women entrepreneurs attending a meeting in Kansas City, Mo., co-sponsored by the Small Business Administration, the Federal Reserve System and the National Women’s Business Council.
The workshop is among 10 conducted nationwide to get women and lenders to devise strategies to help improve women’s access to capital, and to make recommendations for the president and Congress.
From coast-to-coast, the message to Washington is the same: women need better access to credit and more educational opportunities, especially if they’re in homebased businesses.
Much of the problem women face is because they generally seek smaller loans, and it’s difficult to borrow less than $100,000, explained Sherrye Henry, assistant administrator of the SBA’s Office of Women’s Business Ownership.
Banks are less likely to make these loans because the risks are greater and the profits lower than for a larger loan to an existing company.
But there are banks, especially smaller community banks, willing to make the loans. However, it often takes networking to find these lenders, especially for home-based businesses.
Another often overlooked resource is the Small Business Administration which has several programs specifically for loans of less than $100,000.
For example, the SBA’s MicroLoan program provides short-term loans ranging from less than $100 to $25,000. The money is available for inventory and working capital, but not to pay existing debts.
Another option is the Low Documentation Loan for $100,000 or less. The loan features a one-page SBA application, which cuts the paperwork burden for the business and lending institution.
SBA’s Women’s Prequalification Loan allows women business owners to pre-qualify before approaching a lender. The program focuses on an applicant’s character, credit, experience and reliability rather than her collateral.
It’s not easy being a female entrepreneur, especially a home-based one. But if you’re like Birkey and unwilling to take no for an answer, you’ll find solutions long before Washington.
Hold my messages: Turn down the volume! Communications overkill, product of the 1990s world of e-mail, voice mail, fax and the Internet, is beginning to impair companies’ efficiency and drive workers crazy, according to a survey commissioned by the Pitney Bowes office products company. It found managers, on average, receive and send 178 messages a day. Half of those surveyed said they were interrupted by messages six or more times an hour.
Learning the business: Some of the most popular college courses these days are those that teach students about becoming entrepreneurs, says Purdue University management professor Arnold Cooper. Entrepreneurship as an academic field is only about 20 years old, Cooper says, but has received a boost from the success of business people such as Microsoft’s Bill Gates.
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