Experts say women may not face gender bias anymore but that doesn’t make getting a loan any easier
By Deborah Jeanne Sergant
Women may not face gender bias anymore when seeking a business loan; however, they may lack mentoring in how to obtain a loan. Launching or operating a solid business is essential; however, much more is required for convincing a lender to approve a loan.
“The key to understanding financing is knowing exactly how much you need and why,” said John Halleron, owner of JRH Business Consulting in Baldwinsville. Halleron also instructs Boots to Business classes at the Veteran’s Business Outreach Center at Ft. Drum.
“Are you buying equipment, need working capital, do you need a building? How much do you need in each of those buckets?”
This can help determine the type of business loan needed.
Michelle Florczyk, business banking senior relationship manager at M&T Bank, is seeing a growing number of women approach lending better prepared.
“For years, women had less representation with financial leadership,” Florczyk said. “That history can influence how and when women seek out financing today. How prepared and intentional today’s women entrepreneurs are now is encouraging.”
Approaching the loan process with organized information and understanding of the business can make the difference between obtaining funding or not. As Halleron noted, knowing why the company needs money is important. It’s not enough to notice a perpetual shortfall and want to remedy that. In addition, small business owners need to select the right source of the funds. Many organizations’ business grants and loans specifically target women. There’s also the Small Business Administration loans, which Florczyk said have flexible terms and longer repayment periods.
For those seeking a bank loan, it helps to already have established a relationship with the banker. This can lead to a little mentoring from bank personnel since they also want to see their clients succeed. Seek mentoring and support from organizations such as WISE Women’s Business Center (https://wisecenter.org) and other community-based business groups.
“They offer valuable support to many of our clients,” Florczyk said. “They grow with you. Having partnerships and doing your homework is really important.”
Rina Corigliano-Hart, director of client engagement at One Group Risk Management and Insurance in Syracuse, recommended looking at the resources at SUNY Oswego’s Small Business Development Center (ww1.oswego.edu/owier/small-business-development-center); Operation Oswego County’s Micro-Enterprise Program (www.oswegocounty.org/micro.php); and North Central Small Business Development Center (www.northcentralsbdc.org).
Corigliano-Hart works with local small business development centers, WISE and other organizations to look at local and state resources to help women in business. One of her initiatives is to help women entrepreneurs prepare bank-ready business plans.
“For women entrepreneurs, that can be significant. They give guidance and risk management structure. All of that is important because lenders want to see clean financials and projections. SBCD will help to get all of that packaged into a cohesive plan that a lender or insurance underwriter will appreciate,” said Corigliano-Hart.
She added that networking with other members of the business community, a local chamber of commerce and other business organizations can help entrepreneurs shape the conversation they’ll have with lenders.
In general, Corigliano-Hart recommends developing a “clear, direct and up-front about your business and what you need” approach, which can help improve the chances of success in securing a loan, along with providing the right documents and plan.
She said that having all the facts and figures neatly organized and carefully presented makes a business look more successful. This includes:
• What the business does
• Description of the business’s products and services
• Analysis of the market for those products and services
• The business marketing strategy
• The financials and projected income
• The budget
• Proof of business insurance
• Exactly how the loan money would help the business grow
“Have the application completed and provide the clean finances so it’s easy for a lender to review and consider,” Corigliano-Hart said. “You need to tell the story with the cold, hard facts to back it up.”
How entrepreneurs present themselves in a conversation with a lender matters. Corigliano-Hart said that in general, women’s communication style tends to “be more community-focused and comes from a place of wanting to help, whether through their business or volunteering in the community.”
Whether it’s strictly a pitch based on facts or one that tells a story, “a polished pitch is a polished pitch,” Corigliano-Hart said.
She added that the style should reflect the type of business. For example, a hospitality-oriented business should be presented with a warm, welcoming tone. One involved in technology would focus on the problem it solves or prevents.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.