Green Light to Growth: How to Get the Capital You Need

May 21, 2012

The access to capital panel at America's Small Business Summit 2012 featured (from left to right): Diane Tomb of the National Association of Women Business Owners, Roz Alford of ASAP Solutions; Andy Guggenheim of the House Committee on Small Business; Jeanne Hulit of the SBA; Patty Tuttle of Wells Fargo, and Laura Yamanaka of teamCFO.

When it comes to funding your business, it’s all about relationships, according to the diverse panel that made up the access to capital breakout session at America’s Small Business Summit 2012.

“What brings you your fist million in business doesn’t take you to $10 million. What takes you to $10 million doesn’t take you to $20 million, and so on,” said Roz Alford, founder and co-principal of ASAP Solutions Group, LLC, a provider of project services for the IT industry. Roz would know. Since funding her company in the late 1980s the old fashion way – with credit cards – ASAP now generates $85 million in revenue. “At each stage, access to capital came into play.”

Roz recommended that small business owners not wait until times are tough to build a relationship with their banker. And, of course, have a backup plan. ASAP worked for years with a small local community bank that was crushed by the real estate market during the recession. As a result, the bank cut ASAP’s credit lines by 50%. Luckily for Roz and her employees, the company had set aside cash for just such an emergency.

The biggest obstacle for small businesses is also the easiest to overcome – finding out what’s out there. Jeanne Hulit, acting associate administrator for the Office of Capital Access at the Small Business Administration, says her number one tip for small business owners is knowing which banks in their community are SBA lenders and which person working at the bank is an authorized SBA lender. “The banker you work with might not know who it is within their bank,” she warned. This information is available on the SBA website – just type in and your state’s abbreviation. For example, for information on Virginia banks, type:

Patty Tuttle, senior vice president of Wells Fargo’s Mid-Atlantic region, gave five tips for getting a “yes” on a loan:

  1. Demonstrate steady cash flow.
  2. Demonstrate debt management. What other debt do you have and are you able to handle it?
  3. Demonstrate a history of repayment. If you get turned down, ask the bank why and what it would take to reverse their decision. In a lot of cases, it’s not as difficult as you might think to fix whatever problem that’s raised a red flag.
  4. Have a plan. Show that you have anticipated the challenges and obstacles that might lie ahead and that you have a plan to overcome them.
  5. Have a relationship with your bank and banker. This means going beyond just having a checking account at the institution. Communicate your company goals with your banker and work together to figure out how you’ll get there.

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