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Women and capital
Finding seed money to start or expand a business remains an obstacle for female entrepreneurs.
By Kimberly A. PorrazzoPublished: September 01, 2010
Betty Mower PotalivoWomen are opening new businesses at twice the rate of men, according to the Center for Women’s Business Research. And they’re doing so with far less commercial credit. Instead, women tend to use personal credit cards, home equity, and loans from family and friends to fund their businesses. Of those who do seek commercial credit, most approach traditional banks an average of four times before securing a business loan.
“In all loan situations, what I find is that people aren’t necessarily prepared,” says Betty Mower Potalivo, Northern Trust’s regional president for Orange County and the Desert Communities.
Before you visit a bank, she advises, make sure it is the right institution for you: “The first thing (women) need to do is to interview banks and find the bank’s sweet spot. What type of client do they serve?” Determine if the bank even lends to companies of the size and type of your business, she says.
Mower Potalivo also stresses that the banker you pitch your business loan to will have to package it and “sell it” to a committee that will ultimately approve or deny it. Loan applicants must supply financials – and also information on the company’s management team, advisory board and growth strategies – to help the banker build a case for them.
“For you to have your very best shot at getting the best financing,” Mower Potalivo says, “you have to package your application for sales and marketing.”
Presenting the worst-case scenario is also part of the loan pitch. The bank wants to be assured that its loan will be repaid. Be prepared to say, “If things don’t work out, this is the plan.”
“Women need to understand you have to personally guarantee the loan,” Mower Potalivo says. “A second source of repayment is critical.”
The Institute for Women Entrepreneurs at Rancho Santiago College offers counseling for women seeking capital.
“I think a woman who is looking to get a loan for the first time should make a stop there,” she says. “So much of it is in the packaging.”
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Betty Mower Potalivo “In all loan situations, what I find is that people aren’t necessarily prepared,” says Betty Mower Potalivo, Northern Trust’s regional president for Orange County and the Desert Communities. Before you visit a bank, she advises, make sure it is the right institution for you: “The first thing (women) need to do is to interview banks and find the bank’s sweet spot. What type of client do they serve?” Determine if the bank even lends to companies of the size and type of your business, she says. Mower Potalivo also stresses that the banker you pitch your business loan to will have to package it and “sell it” to a committee that will ultimately approve or deny it. Loan applicants must supply financials – and also information on the company’s management team, advisory board and growth strategies – to help the banker build a case for them. “For you to have your very best shot at getting the best financing,” Mower Potalivo says, “you have to package your application for sales and marketing.” Presenting the worst-case scenario is also part of the loan pitch. The bank wants to be assured that its loan will be repaid. Be prepared to say, “If things don’t work out, this is the plan.” “Women need to understand you have to personally guarantee the loan,” Mower Potalivo says. “A second source of repayment is critical.” The Institute for Women Entrepreneurs at Rancho Santiago College offers counseling for women seeking capital. “I think a woman who is looking to get a loan for the first time should make a stop there,” she says. “So much of it is in the packaging.” Get headlines in your hand at OCMETRO.com/apps |
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