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Women Entrepreneurs and Financing in the Business World

Posted on 6/30/2016 by EDTP Coordinator in LAEDA News

Women entrepreneurs came together at LAEDA Headquarters to learn how to finance their own businesses and the additional challenges that women face when looking for capital. The seminar served as an overview of the 5 C’s of credit, accessing capital, and different sources of funding. Bertha Sarmina, Program Manager of LAEDA WBC, shared her expertise on women in business, and what women can do to finance their business.

When it comes to women’s access to capital, women start their business with half as much capital as men. So what can women entrepreneurs do to finance their businesses?  “Everyone must prepare to borrow to take their business to the next level; examples include like hiring your employees or taking business to a new location. Remember to always start small and build up,” Bertha Sarmina emphasized.

As part of the topics of the seminar, Ms. Sarmina explained the 5 C’s of credit, which are the following: (1) Character, which is credit rating meaning your reputation based on paying your bills on time, and paying taxes accurately and such, (2) Capital, where the lender will see the savings or capital that the entrepreneur has to invest in their business, (3) Collateral, where the entrepreneur must show their ability to guarantee the loan with valuable assets, (4) Capacity, where the entrepreneur must show their ability to repay the loan to the lender, and (5) Conditions, where the lender will look at the economic conditions that the entrepreneur researched about their business in accordance with the overall economy. “Lenders would feel more comfortable giving you a loan if you have accounts receivables because they know you will have capital,” Bertha Sarmina stated. “Also, when it comes to starting your own business remember that it is essential to have letters of recommendation to give to the lender. You must have letters of recommendation from people that are related to your business such as your banker, your supplier or even your landlord."

The seminar also covered ways for sourcing funds. One common source of financing are friends and family; these are good sources because they will lend you based on your character and also one receives great feed back on the business. Bertha Sarmina mentioned, “You have to have savings to start your own business. No one will invest fully. Therefore it is of essence to have capital saved, however when it comes to starting your business you must prepare to borrow.” Bertha Sarmina talked about the process of external financing as well, such as banks, non-profits, angel investors, online lenders and crowd funding. Bertha Sarmina shared a few different types of crowdfunding platforms: GoFundMe, Kickstarter, indiegogo.com and Kiva USA

Ms. Sarmina concluded the seminar reminding the audience that it is important to start now in setting goals, keeping good records, cleaning up their credit before starting a business, and saving capital. “Borrowing is hard so prepare now because like the Chinese proverb says, ‘The best time to plant a tree was 20 years ago and the second best time is now.’”

LAEDA hosts numerous seminars on a wide range of topics. Our next seminar, Good Tax & Accounting Practices Help Grow Your Business, While Bad Ones Hurt It! It is scheduled for Wednesday, July 20, 2016 at 6:00 PM at LAEDA's office. Click here to join our mailing list to learn about all of our upcoming seminars and events.