SERIES 2 – DAY 2 NATIONAL PRESS CLUB Morning Sessions
Day 2 morning sessions at the National Press Club. Our day started at 7.a.m and ended at 8 p.m it was power packed, let me tell you all about it. Despite the time zone differences for several of us we were happy and elated to meet so many other business owners throughout the U.S. We met in the foyer of the hotels and waited for the buses that would transport us to our first stop, the National Press Club.
Panel 1: Access to Capital
At the National Press Club John Arensmeyer, Founder and CEO, Small Business Majority opened up the morning with a Welcome and Opening Remarks. Panel 1 Access to Capital: The Key to Entrepreneurship and Economic Development facilitated by Amy Cortese, Journalist and Founder, Locavesting Media included Connie Evans, President and CEO, Association for Enterprise Opportunity; Brayden McCarthy, Head of Policy & Advocacy, Fundera and Catarah Coleman, Co-Owner, Southern Girl Desserts. This panel addressed a concern of Hazel Hector, Founder and Executive Director, Jubilee Mobile Institute, Inc in her letter to me for the Summit, access to capital. Here are some highlights of what was discussed in Panel 1:
- For banks small businesses are seen as high cost risk factors
- There are about 8,0000 businesses denied daily for funding
- Women represent one out of every 23 loans
- Women businesses grow slower than men
- Women businesses do not seek loans or funding for their businesses
- There are several non-traditional funding sources available to small business owners: Kiva and TILT Forward that do not use FICO Scores but other scoring factors; Lending Club (peer-to-peer lending based in San Francisco); RapidAdvance in partnership with SBA and Credit Unions
- Additionally, several companies offer business credit cards to help grow your business and some of them offer low interest rates and flexible payment plans
- It is in your best interest to seek funding before you need it, than when you need it. If you wait until then you will be susceptible to seek any type of funding presented to you.
Let’s hear from Catarah Coleman, Co-Owner, Southern Girl Desserts as she tells her story about her funding experience:
My partner, Shoneji and I began to seek a small loan in 2012 to cover expenses for our build out as we prepared to open the doors to our mall based bakery. We were denied. Then immediately we were approached by a customer who informed us that we could receive $40,000 within three days with no collateral. We tried it and it worked; it was so easy! That loan we were able to pay back within six months with no problem. Then we decided that we needed some working capital and went to our bank for the loan. We thought that since we had been using some of the small business products that they offered (i.e. payroll) and was depositing an average of $50,000 a month that it would not be a problem getting a loan from them but we found out that this was not enough. Again we were denied by them.
Ironically, we had been receiving several types of literature, emails and phone calls from other lending sources offering us quick cash. Since we had previously been able to pay off our previous loan quickly and the process was easy, we decided to accept one of the several offers that we had received. This offer was accompanied by a broker. The broker allegedly performed the research and provided us the best type of loan for our needs, so we were told. Once again we were able to quickly secure another loan, but then things changed. This loan in particular began to interfere with our cash flow. The payback rate began to defeat the purpose of acquiring working capital in the first place.
Let you tell you why this arrangement was not good for us. There were two loans with a payback rate of 30 and 90 days. Every dollar and cent from the merchant side to the daily ACH withdrawals was drowning us. Shoneji and I were so stressed because I was getting married and we still had to manage payroll. We had to do what it took to stay afloat and still pay back the loans that we had acquired for working capital; which actually did not turn out that way after all. We did not know what to do but one day we received a flyer that changed our lives from Opportunity Fund.
At first glance the flyer from Opportunity Fund seemed the same as the other funding information that we had been receiving but with one caveat upon thoroughly reading their literature I felt that maybe we should give them a call. I don’t know how but I felt that it was worth a shot. “I felt as if Jesus himself was on the other line and my faith was restored! I knew I was on the phone with someone who wanted to help and was going to do their best to do so.” It took about two years, but September 2014, our initial loan with Opportunity Fund helped to save our business, sanity and to bring things back to normal. We found out later that those two loans put us at a 56% interest rate; we would have never been able to get out of that bind at the rate this arrangement had us going.
Shoneji and I will forever to grateful to Opportunity Fund for coming when they did. Now we only have an 8.5% interest rate after Opportunity Fund got all of this funding fiasco cleared up. And none of those other loans show up on our credit report! We knew Opportunity Fund was different because they offered low interest rates, longer terms and Eric and his team had a genuine concern about the financial health of our business, and this is why they are so special to us. We were able to experience a human side of lending.
I advise anyone to ask questions before they sign anything! Make sure that they explain everything clearly and that you truly understand what the pros and cons are of the loan. Don’t feel pressured to accept the loan terms, if they want your business they will make the necessary adjustments. And if they don’t that lender does not have your best interest at heart.
This was one huge learning experience for us. We knew that baking cakes and pies would take us on a journey, well it has and we are better for it. “Be present in all aspects of your business, it could determine your longevity!”
Thank you Catarah and Shoneji, Owners of Southern Girl Desserts, for being candid about your lending experience. If anyone is interested in learning more about Southern Girl Desserts visit http://www.southerngirldesserts.com/, email firstname.lastname@example.org or email@example.com. Also you can connect with them on Twitter @Dessertdivas, or on Facebook or Instagram @southerngirldesserts.
Tell us a lesson that you learned in being a business owner, we would love to hear from you. Of all of the submittals we will choose a few comments to post, will it be yours?
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Founder/Owner Jabez Enterprise Group (JEGroup)
All Photo Credits: Vernita Naylor (Jabez Enterprise Group (JEGroup)) Unless Otherwise Noted.