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What to Look for in a Lending Partner as a Woman Business Owner

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Many women business owners find the biggest obstacle they face when starting out is acquiring the funding they need to launch their company. Fortunately, today there are a range of funding options available, and finding a lending partner who champions women-owned businesses and helps them find the financing they need to succeed is the first step. 

The best lending partner is traditionally one that takes the time to understand your business, offers the type of financing you need to accomplish your goals, and aligns with your personal values. You should be looking for a lender that …

Understands your business 

Finding a bank that will take the time to understand your business may sound simpler than it is. In today’s technology-driven world, business-banking relationships can become more computer-facilitated than relationship-driven. Look for a bank that will spend time to understand what makes your business unique. Spend time to tell them about your needs, strategy, customers, and challenges. 

Offers the right type of financing 

All loans are the same, right? Not necessarily. Banks have access to several types of loans and each one has a unique purpose. Spend some time talking to your banker about the types of programs and industries in which they have experience. Discuss what their underwriting criteria is for distinct types of industries and loans. 

Does the bank specialize in heavy machinery loans? Do they have experience with complex real estate transactions? Are they experienced with the cash flow challenges associated with insurance and Medicare that can burden healthcare providers? Understanding your bank’s experience, underwriting criteria, and loan appetite can make a powerful partnership. 

Has the authority 

You might think getting a loan approved follows the same process regardless of the bank. Although this sounds logical, it’s not how banking works. Individual bankers may have various levels of lending authority and decisions may — or may not — be made at the local level. Asking simple questions about lending authority, the approval process, and overall authority can help to give you a picture of the approval process and how long it may take. 

Knows the local market 

Smaller, regionally focused banks can sometimes be better partners because they know and understand local market conditions. They know the leaders within the market, have knowledge of their customers, and have a view of an individual business owner’s management skills. Understanding this level of detail can result in an increased emphasis on a borrower’s character and skills rather than just the application of a credit-score model. 

Understands SBA loans 

Does your banker have experience with the U.S. Small Business Administration (SBA) loan programs? Federally subsidized loans can reduce risk to the bank, which makes it easier for banks to lend money. SBA loans may be an option for businesses whose cash flow or collateral may be inadequate for them to obtain traditional bank loans. 

Aligns with your personal values 

Finally, does the lender align with your personal values? Are they involved in the community? Do you know multiple individuals within the bank? Do they treat you like you are important? Working with a bank that not only understands your business, but also understands your personal goals, makes a world of difference and can make you proud of working with the institution. 

Understanding what makes a good lending partner can help to streamline your selection of a bank and expedite your business goals. Make sure to ask many questions when selecting a financial partner so that you completely understand how they can assist your business.  

At Valley, we’re committed to helping women business owners with the financial services, networking support, and resources you need. You can register for our Women in Business program today or contact us to learn more. 

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