I’m the type of person that meets a milestone or goal and pauses long enough to tick it off the list before moving on to whatever the next thing happens to be.
This week, I took a moment to pause and celebrate a few small things, and a not-so-small thing, that happened in my business.
My classes are becoming more popular, and I’ve received requests to teach across NB and in Nova Scotia. An upcoming class in Halifax has only one seat left, I’ve got a private class full in Dartmouth, and just announced another workshop in Sackville, NB at the end of March. These are all worth celebrating!
I’ve also been meeting with my small business advisor at the bank to gain access to a line of credit/loan to let me grow my business. Alas, it is always a catch 22 with business growth – I need capital and cashflow to grow my revenue, but I need to grow my revenue in order to access the capital and gain the cashflow I need to grow. The amount of credit a bank will provide is usually linked to the company’s past revenue…which is restricted because…well, you get the picture. It’s a circular argument.
I’m not alone in this frustration. Women entrepreneurs, despite having greater success rates and employing more people, are systemically underfunded in a startup world that is laser focused on tech. We get turned down by banks, we get asked if our husbands will co-sign, we get passed over for accelerator programs and venture capital. I continually get looks of surprise when someone who’s pegged me as “homemaker seamstress” learns I have advanced science degrees. Some of the bias is certainly unconscious and built into the system. Some, however, is just the archaic ways that traditional banks look at business financing.
In the article I linked above, it notes that women are not necessarily more risk averse than men; they are better at identifying and mitigating risk. I am cautious about accumulating debt, and approached financing my business with the goal of not accruing any debt if I could avoid it. And this was a mistake.
What that meant is that I drained my cash reserve to move the business forward. Cashflow is tight. So now that I want to expand, I don’t have a cash reserve to do so. Because I built my business cautiously before going full time into it, it doesn’t have huge revenue numbers – a bank doesn’t necessarily see the caution and prudence, just the lack of profit.
In fact, it took the bank 2 years before they would even issue me a $1000 limit credit card for my business so I could purchase my materials wholesale. When I opened my account, the business advisor at the time told me the minimum application for a credit card was a $10,000 limit. I was firm in saying I didn’t want that, but he was firm and submitted the application for that amount – and it was of course rejected. Meanwhile, I spent 2 years funnelling business expenses through my personal credit card and doing mountains of paperwork and bookkeeping instead of working on my business. I think of how banks were throwing credit cards at me back when I was in university, when I had no income or credit history, yet getting a simple credit card or line of credit for my business is an uphill battle.
There are certainly other alternatives to traditional banks when what you need is capital for expansion or startup – great places like CBDC, and BDC, or crowdfunding – but I’m not looking for that right now. I’m looking for simple access to the tools that will help me run my business efficiently. I want enough credit at a low enough interest rate to be able to keep me stocked in the wholesale supplies that I need. I want to be able to pay a developer to help me launch an online retail site. I want to be able to buy a plane ticket to travel to meet suppliers. These are things that shouldn’t require an outside loan. It’s simple, rotating, re-usable credit.
Enter a new business advisor – the lovely Sarah. When she took over at my local bank, we met and I explained my woes to her. She immediately moved some things around and got me a credit card that alleviated the bookkeeping and supply buying nightmare. For the past month, she’s worked diligently with me to find a solution that will let me launch my new website, within the constraints of the system.
The same old requests kept creeping in – you aren’t asking for enough money, we won’t consider that small a loan, etc. – but we kept at it anyway. In the end, we ended up with a solution that will work for now. With the projected growth for this upcoming year, I should be able to convert it into a low interest line of credit in 2020.
So my Thursday thought lesson for today? Keep trying. Talk to other women entrepreneurs and find out how they finance what they do. Demand better from your bank. And don’t let the bastards keep you down.