Women entrepreneurs from Austin met last month for a round table discussion held by two organizations that advise and support small businesses.
Austin resident Vernita Johnson hosted the event at DLV Printing Service Inc., the business she started 25 years ago out of her sister’s house.
“A lot of people don’t know about the resources out there,” Johnson said. “In 1992, I had no help, none. I didn’t even think people like this existed.”
The main focus of the conversation was how to secure affordable funding, a particular challenge for women and minority-owned small businesses.
“Access to capital is one of the top issues that business owners find challenging,” said Geri Aglipay, who handles Midwest outreach for Small Business Majority. “Increasingly, banks are not lending to small business owners.”
Small Business Majority is a national education and advocacy organization founded in 2005 with 10 state offices across the country. Their efforts focus on issues facing small businesses, defined as having 100 employees or less.
Most startups are not able to qualify for loans from traditional banks, according to Aglipay, leading some to turn to online funding that is unregulated by the government and can often be predatory.
Some online lenders mask very high interest rates that can lead to a vicious cycle for business owners. Aglipay explained that women and minority businesses can be disproportionately impacted because they generally have fewer assets to show lenders.
“Generational wealth is something that’s lacking,” Aglipay said.
Accion, a small non-profit lender operating since 1991, offers personalized support as well as business resources and training to its clients.
“A lot of people are really scared to come to us after being turned down by a bank,” said Tierra Bradford, the representative assigned to the Austin area. “We’re not anti-bank, we’re trying to get you ready for a bank loan.”
By using a business owners’ personal credit, Accion is able to assist those who lack the assets and profits to secure a traditional loan. There is no minimum credit score requirement, although a person’s score will determine the rate of the loan.
“They understand that life happens, and that’s why they’re a little bit more flexible,” Aglipay said.
Their loans can be as small as $500, which can help those with a low credit score, or as large as $100,000. Clients without assets and with poor credit can also use a co-signer with strong credit as collateral.
Bradford, who lived in Austin until recently, said being a familiar face in the community allows her to build stronger relationships with her clients.
“It’s an area that’s often overlooked,” Bradford said. “I wanted to help bring attention and awareness to Austin.”
Johnson learned about Accion several years ago through an event with the Austin Chamber of Commerce. Since then they’ve helped her secure loans for equipment and with a remodel of her store.
Last month, Small Business Majority and Accion partnered with Chicago City Treasurer Kurt Summers to launch SimpleGrowth, an online marketplace specifically geared toward small businesses based in the city.
Business owners can fill out one application to connect to microloan options from local lenders that offer more transparency and support that other lenders operating online. It also offers referrals to assistance centers for those who need help fleshing out their business plan to strengthen future applications.
Aglipay said that kind of in-person support can be invaluable for small business owners that are trying to balance their professional responsibilities with the demands of raising a family.
“We want to see you succeed as an individual, as well as a business owner,” Aglipay said.