In With the New

By Ann Sullivan, WIPP Chief Advocate

With inauguration festivities up ahead and a newly elected Congress hard at work, it is time to get down to business. The New Year serves as a good reminder that while there may be some new faces in Washington, many of the policy ideas are those we have seen before. Below are some highlights of what is both old and new in Washington for 2017.

Old and New. For the first time in years, our Country has unified government in the House, Senate, and White House. The difference this time is that the government is united by the Republicans, not Democrats. Amazingly, it’s only been six years since the Democrats controlled the government. New—now the Republicans are in change.

Old. Some problems don’t change. Creating more opportunities for women entrepreneurs to access capital continues to be a major theme for WIPP in 2017. Today, women entrepreneurs receive only 4% of commercial loan dollars. WIPP’s access to capital platform Breaking the Bank has been well received by policy makers because it is focused on solutions.

New. Some problems just surfaced. WIPP recently released a report, “Do Not Enter: Women Shut Out of U.S. Government’s Biggest Contracts,” finding clear evidence that women-owned small businesses have limited opportunities to win some of the federal government’s most sought-after contracts, despite a proven ability to deliver innovative goods and services. The report also outlines steps policy makers can take to rectify the problem.

Old. 2016 Was certainly a year of regulations for federal contractors. From Paid Sick Leave, to Overtime, Fair Pay and Safe Workplaces—it was often difficult to keep them straight.

New. 2017 is the year of deregulation. President-elect Trump and the U.S. House have strongly indicated many Obama administration rules will be repealed. The House just passed the Midnight Relief Act to quickly repeal any rule finalized in the last 60 days of an Administration. WIPP supports efforts to make it easier for women entrepreneurs to work with the government.

New. Government contracting finalized. While it took many years, SBA has finally released the new all-small business Mentor Protégé Program, and new rules making it easier for WOSBs to work with other WOSBs. WIPP looks forward to working with SBA to ensure WOSBs can use these program changes to grow our businesses.

Old. Wait –Nothing gets repealed in government contracting, there is just more to pile on.

Old and New. In 2017, 125 women hold seats in the U.S. Capitol building. One hundred and four women hold seats in the U.S. Congress, making up over 19 percent of the chamber. A greater percentage of women serve in the U.S. Senate, where there are 21 women (making up 21 percent). While the total number of women is identical to the number last Congress, there is one key difference—64% of the new women elected are women of color.

New. Firsts in Congress. Representative Lisa Blunt Rochester of Delaware is the first woman, and woman of color to serve from Delaware. Senator Catherine Cortez-Masto is the first woman, and first woman of color Nevada has elected to the U.S. Senate.

As WIPP prepares to work in the 115th Congress, we plan to present our ideas based on input from membership. We will work with all Members of Congress, and the new Administration, because one of the few things everyone agrees on is that enabling businesses to grow strengthens our economy. Women are entering the ranks of business ownership at record rates, and launching a net of more than 1,100 new businesses each day. We will work for the next several years to reinforce and grow the success of women’s business owners.

So what are we waiting for—let’s get to work.

Santa’s Wish list for Eight Crazy Nights

By: Ann Sullivan, WIPP Chief Advocate

Being located in the Nation’s Capital and leading the advocacy team for WIPP, gives us the opportunity to wish for things uniquely Washington. So, in the spirit of the holidays, and maybe a little tongue in cheek, here’s our wish list for Santa with a nod to Hanukkah.

Santa, please bring us:

1. A Congress that knows how to make deals. This is also called bipartisanship but at the heart of the matter, it requires willingness to bend without compromising principles (or giving away the store). A lost art in Washington, straight party votes and initiatives lead to a “do-nothing” Congress. Perhaps the new President–elect, who wrote a book on deal-making, can assist.

2. More women in Congress. Building on the first wish, we know firsthand that women in Congress are inclined to be practical and open to working with the opposing party. The 114th Congress will start with a record 108 women. Santa, please get more women to run for public office.

3. Busting through the 5% women-owned small business goal for federal contracts. We know that record $$$ were awarded to women-owned firms in 2016, but there is so much work to do to ensure they have equal access to federal contracts. Santa, you may have to place some of your elves in federal agencies to make this happen.

4. Rethinking Red Tape. Federal contractors got hit with lots of new requirements, for example, the Executive Order called Fair Pay and Safe Workplaces. Although the contracting community pointed out many flaws in these Executive Orders, they were largely ignored. So, Santa, just get rid of these Executive Orders.

5. More WIPP accomplishments for 2017 than we had in 2016. Ok, we know this one’s on us. We have a pretty long list of 2016 accomplishments on the legislative and regulatory side but we want the sled to overflow. Because of our efforts, Health Reimbursement Accounts are an option for small employers, contracts through the WOSB procurement program increased to over $18 billion, there is a new Mentor-Protégé Program for WOSBs, and more!

6. The end of massive motorcades. This really is an inside Washington request, but the motorcades for the President and visiting dignitaries have now reached epic proportions and wait times have stretched to half an hour. Talk about impeding commerce. We could really use a little Santa ”stealth” when it comes to moving the president around the city.

7. A fresh look. We are in the final days of the 114th Congress and about to head into the 115th Congress. Out with the old and in with the new. Here’s hoping Congress hits the reset button to look at women’s business issues in a new way.

8. A stable federal budget cycle. Actions of Congress directly affect the behavior of the economy and the stock market. Congress has all the tools it needs to produce a budget and accompanying appropriations every year. These last budget minute shuffles and funding extensions damage the economy and really put small contractors in a tough place. We realize this is a really big ask. But our understanding is that Santa can work his magic anywhere.

WIPP’s advocacy throughout 2016 has yielded great results for women entrepreneurs, but our strong advocacy is never over. There is still much work to be done. Thank you for your support and happy holidays from the WIPP Policy Team!

Getting Women ONBOARD

By: Debbie Kobrin, WIPP Government Relations

WIPP has consistently advocated for increased female participation in venture funding. Last week, SBA confirmed WIPP’s conclusions with the release of Measuring the Representation of Women and Minorities in the SBIC Program – a groundbreaking study showing that women at small business investment companies (SBICs) play an important role in bridging the lending gap to women-owned firms.

The SBIC program is a multi-billion-dollar investment program that bridges the gap between entrepreneurs’ need for capital and traditional venture financing. SBICs match SBA guaranteed loans with their own funds and utilizes professional fund managers to identify and finance promising small businesses. With a current portfolio of $26 billion, the program has invested in some of our nation’s most iconic brands including Apple, Tesla, and FedEx.

Overall, the SBIC program has been successful, though it has failed to serve women and underrepresented individuals as well as it should. To better understand this challenge, SBA commissioned a report that found when women and underrepresented individuals are the investors, they are more likely to invest in firms like themselves.

The report also found greater gender diversity among SBIC investment teams than is present in the broader venture capital and private equity community. Nearly 12% of SBIC funds have women on their investment teams, compared to less than 8% in the private equity industries. While SBIC funds are reaching more women than private funds, it is still nowhere near enough.

As WIPP’s access to capital platform Breaking the Bank indicates, venture capital is still too elusive for women-owned firms. Venture capital is a classic “chicken and egg problem”, too few women serve on SBIC boards, which leads to the cyclic exclusion of women-owned firms from SBIC investments.

To increase the number of women and underrepresented individuals on SBIC and corporate boards SBA, LinkedIn, WIPP, and other partner organizations have created the Open Network for Board Diversity, or ONBOARD.

ONBOARD is an online platform that serves as an opportunity for women to be more involved in equity-based financing. By providing more opportunities for women to serve on corporate boards, we will increase opportunities for women-owned firms. To join ONBOARD, click here or by search “ONBOARD diversity” in the Linkedin search bar.

To learn more about ONBOARD please watch Give me 5: ONBOARD: Open Network for Board Diversity presented by SBA, and hosted by WIPP’s Chief Advocate, Ann Sullivan.

Does the Tax Code discriminate against women?

By Caroline Bruckner, Managing Director of the Kogod Tax Policy Center

indexWomen-owned businesses are one of the fastest growing segments of our economy. Between 1997 and 2013, the number of women-owned businesses increased by 59% – 1.5 times the rate of U.S. businesses overall, according to a 2013 Women-Owned Business Report prepared by American Express. What’s more, over the past 16 years, employment by companies owned by female entrepreneurs is up by 10% and their revenues grew by 63%. Both increases exceed those of all but the largest, publicly traded firms. Today, more than 8.6 million U.S. businesses are owned by women. They generate more than $1.3 trillion in revenues and employ nearly 7.8 million people.

Those are impressive figures, especially considering that women business owners face many challenges men do not, such as having a much harder time accessing capital than their male counterparts. Only 4% of all commercial loan dollars go to women, in fact. But what other hurdles must they overcome? What about the U.S. tax code? Is the tax code—first codified more than 100 years ago, before women even won the right to vote—written in a way that inherently discriminates against women entrepreneurs?

The Kogod Tax Policy Center, with WIPP’s help, intends to find out.

Kogod will perform groundbreaking research in the coming months into whether small business tax incentives discriminate against women business owners—a question that has received scant attention from policymakers and academia.

Given the current political and budget environment, we think that researching and answering this question is vital to informing Congress about the policy implications of existing small business tax incentives as policymakers look to move forward with tax reform.

The tax code is ripe with provisions designed to specifically target various taxpayer populations like small businesses, veterans, and low-income workers. However, little academic or policy study has been dedicated to the tax challenges women business owners face and whether small business tax incentives favor men.

But how could the tax code discriminate against women? It can’t see the difference between male and female any more than it can play the piano or skip rope. Well, let’s look at some details of the tax code’s inception:

  • The income tax code was written in 1913.
  • Women didn’t get the right to vote until 1920.
  • Women weren’t able to fully access credit until 1974.

Women business owners weren’t even a footnote as our nation’s tax code was being written and developed. Simply because the tax code is supposedly gender neutral does not mean it impacts people equally.

We plan to analyze the federal budget implications of annual small business tax expenditures in relation to how many women-owned firms claim them.

We recently announced our project at WIPP’s Annual Leadership Meeting in Washington, D.C. As part of the study, Kogod will partner with WIPP to survey women business owners to determine how they view the tax code and its impact on their business, so watch your inbox and make sure to participate so we can use your experience and voice in our study!

Given the enormous role women entrepreneurs play in our economy, answering these questions will determine whether they are playing on a level field and could lead to positive policy changes that help the economy overall by boosting women’s entrepreneurial output even more.

The time has come to review the tax code and determine whether the specific tax provisions are serving women entrepreneurs so they can fully unleash their economic potential.


If you have questions about our research, want to help support the Kogod Tax Policy Center with a gift or would like to participate in the survey, contact Caroline Bruckner at

Access to Capital: It’s Time to Aggressively Reduce the Gap for Women Owned Businesses

By JeFreda R Brown, CEO, Goshen Business Group LLC, WIPP National Partner

JeFreda BrownAs a woman who owns a business and has clients that are women owned businesses, I have personal experience with the issues that we face in accessing capital. Several of my female clients have had this fear of seeking capital for their business because of the strict requirements by banks and other financial institutions. There are so many other companies coming to the forefront to offer capital to businesses. However, some of their requirements may not be the best for business owners. The interest rates and repayment options may not be the most favorable for businesses.

In a report prepared for the National Women’s Business Council (NWBC), it was stated that women owned business owners raise small amounts of capital to fund their companies and therefore are more reliant on personal sources of financing. It also stated that because of this, it diminishes their prospects of growing their companies. This is because we know that it takes money to make money. The NWBC also reported that there is a gender gap in equity financing. Men owned companies have received .4% of venture capital funding whereas women owned companies have only received .1% of venture capital funding. The NWBC also reported that only 5.5% of women owned companies use loans from banks or other financial institutions in comparison to 11.4% of men owned companies.

We can clearly see that women owned companies are the fastest growing segment of all businesses. So why is there such a problem with these women obtaining capital for their businesses? What needs to be done to reduce some of the restrictions that exist and cause barriers for women owned businesses? It’s time to reduce this gap for women entrepreneurs.

It is not discussed much as I can see, but from personal experience in dealing with women entrepreneurs directly, past financial hardships are big barrier that causes some women to fear even trying to obtain funding. Things like personal bankruptcy makes it basically impossible to obtain capital for a business. Many women have gone through divorce, loss of job, medical issues, and more, and these life changes have caused financial hardship. Some women have had to file bankruptcy or have had credit issues from these financial hardships. As these women have worked hard to turn things around, something like a bankruptcy automatically denies them for financing. In my discussions with women entrepreneurs that have experienced these things, it would be very encouraging to have programs in place that will help these women obtain funding and help them rebuild their credit at the same time. The programs would provide some type of micro loans that also include financial literacy education and steps that the borrowers would have to take to progress in the program. With mortgage loans, some lenders require borrowers to take homebuyer education courses before being approved for a mortgage loan. Something similar to this would be great for women entrepreneurs who have had some credit challenges.

Another barrier for women entrepreneurs to obtain capital has been the restrictions placed on home based businesses. It’s quite obvious that if these women could obtain the capital they need to efficiently operate their companies, they would more than likely have brick and mortar offices for their businesses. A home based business basically has next to none overhead expenses. It’s the easiest way for someone to begin a business. However, being home based shouldn’t be a punishment and be a barrier to obtain funding. Data exists to show that more women entrepreneurs have home based businesses than men.

Another issue that seems to be a barrier for women entrepreneurs in obtaining capital is the industry the business is in. Studies have shown that businesses in high tech industries tend to obtain more capital. There are specialized types of funding that exist for technology and innovative products and services. There seems to be restrictions on service based companies that have varying revenues each month. These restrictions need to be removed. Supply and demand does dictate how consumers will purchase goods and services, however; there should be no restrictions on funding based on the type of industry a business is in.

We know that small businesses are the backbone of America. Many of the large companies that exist today started out as a small business. The federal Government needs to address the issues that women entrepreneurs face in obtaining capital more. It seems only logical that with women owned businesses being the fasted growing segment that there should be more support for us in obtaining capital. The success of our businesses is very crucial for the American economy. When a woman owned business is able to grow, it can put dollars into the economy and stimulate the economy. It can also provide jobs and reduce the unemployment rate.

We implore the presidential candidates to make this issue a major part of their platforms. We implore members of Congress to make this issue a major part of discussions and plans going forward. There needs to be more education available to women who want to start a business. This education needs to be strategic with the focus on financial and business compliance. Right now, there is not enough of this. Companies like mine provide this type of consulting. I believe the federal Government should also partner with companies like mine and other subject matter experts in developing solutions to this issue in obtaining capital. Talking to those of us who are out here in the struggle is the only way to understand the problems that exist and develop suitable solutions for all women owned entrepreneurs. Another way the Government can get involved is to work with larger women owned businesses that have been successful to start a mentor protégé program to help smaller women owned businesses develop. The program has been successful for federal contracting. I believe it would be a huge help for smaller women owned businesses and at the same time help the large businesses in having additional capabilities to provide to their customers and clients. It’s time to be more assertive in reducing and eventually removing the gap for women entrepreneurs in obtaining capital.

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Momentum and Capital

magdalah-silva-11By Magdalah R. Silva

If money is the momentum that makes the world go round, and women represent approximately 40% of the global labor market, control over $20 trillion of total consumer spending globally, and are starting businesses at twice the rate of male owned businesses, then where is the capital momentum for women? In this decisive election cycle, we should definitely be keeping our eye on which candidates will drive momentum. Let’s first agree on some basic fundamentals on the women’s entrepreneurship ecosystem. 1) The growth of women businesses is good for the economy, 2) Unconscious bias plays a significant role in accessing capital, and, 3) The control and disbursement of capital is not in the hands of women. To balance this ecosystem and create momentum candidates need to agree first and foremost that getting money in the hands of women business owners is not a “women’s issue”, it is an American competitiveness issue and that capital remains among the highest predictors of a company success.

  • Growth of women’s business is good for the economy. That’s where all of us come in. Whether you are a policy expert, journalist or blogger we can heavily influence the priorities of a new administration. If the conversation about supporting the growth of women businesses is stimulated in public conversation than it is highly likely that the markets will also see it as a strategy for economic growth, and job creation. This branding concept can result in exponential growth of new business, a greater appreciation by investors of the women’s market and establishment of new policies aimed at the support of women’s entrepreneurship.
  • Unconscious bias plays a significant role in accessing capital. Gender bias, including gender discrimination, conscious and unconscious, is real. Many studies have revealed that unconscious beliefs about women and their business capabilities have manifested itself in various phases of the American culture specifically in raising venture capital. These biases make assumptions relative to capabilities and types of businesses men and women launch resulting in types of investments they ultimately receive. The good news is, according to a study by Babson College, “Venture capital firms with women partners are twice as likely to invest in companies with a woman on the management team (34% of firms with a woman partner versus 13% of firms without a woman partner).” We need programs aimed at preparing more women to be VC’s!
  • The control and disbursement of capital is not currently in the hands of women. Though this is currently true, there is a shift taking place where technology is having a significant impact on the ability to access capital in many forms such as mobile banking, global peer-to-peer lending and trusted transactions conducted on the web through blockchain. The advent of blockchain, where two or more people don’t need to know each other to conduct a trusted business transaction will be revolutionary. This technology is behind digital currencies such as Bitcoin, and will disrupt the current models we have today. This will allow for breakthrough applications that run without banks while cutting cost and saving transaction time. It will ultimately change the dynamic between companies and their consumers while allowing new entrants into the lending business. The system will be built on social and economic capital controlled by individuals rather than intermediaries. If the women’s market makes a shift in that direction it could have a significant impact on how traditional lending is currently done.

So how about some fun facts to close off my blog to encourage the rise of a Momentum Capital Movement for Women, here you go:

  • The average ROE of companies with at least one woman on the board over a six-year period is 16%; ROE of companies with no female board representation over the same period is 12%. Source: Credit Suisse
  • Women entrepreneurs have an estimated credit gap of between $285 billion and $320 billion, depending on geography, and an estimated 70 percent of women-led SMEs are either unserved or underserved financially. – International Finance Corporation (IFC)
  • Women control over $20 trillion of total consumer spending globally. Women make or influence up to 80 percent of buying decisions worldwide, on everything from appliances to cars to medical services. – Dalberg
  • When women earn income, they reinvest 90 percent of it in their families, as compared to men who invest only 30 to 40 percent. This ‘multiplier effect’ boosts social and economic outcomes for entire communities. – Half the Sky

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Why Women Business Owners Need Better Access to Capital

dimenco-emilia-picBy Emilia DiMenco, President & CEO, Women’s Business Development Center

As a retired banker and now President and CEO of the Women’s Business Development Center, I have focused my entire professional career on helping small business owners access capital for growth. As any business owner will tell you, financing is critical to business growth.

Traditional bank financing is attractive because of its typically low interest rates. Yet women business owners – who generate more than $1 trillion annually in receipts, and are growing at 1.5 times the rate of average businesses – are consistently denied bank loans. In 2013, less than one in three loan applications for women-owned firms were approved.

A 2014 report issued by the Senate Committee on Small Business & Entrepreneurship on barriers to women’s entrepreneurship found that women receive only 16 percent of conventional small business loans. This amounts to 4.4 percent of the total dollar value of all small business loans, leaving women-owned firms with only $1 out of every $23 that is being loaned to small businesses.

WBDC observes this problem firsthand when a fast-growing female entrepreneur wins a corporate or government contract, then has trouble getting the capital she needs to fill the order. If she’s denied loans, she has a couple of options: she either turns to unregulated, predatory merchant cash-advance lenders or other high-interest sources of capital, or her business stagnates.

The real solution lies in the hands of federal policymakers who have a responsibility to make changes which will help women get capital at a fair interest rate. As a start, policymakers must improve the SBA 7A program’s standards to allow sales from new and prospective contracts to be taken into consideration when approving a loan — not simply a company’s historic cash flow. Next, they must Increase funding for non-profit alternative lenders such as Community Development Financial Institutions and micro-lenders. Finally, they must provide transparency and disclosure for small business lending so that small businesses are informed upfront of interest rates, fees, and other terms.

New measures are desperately needed now to remove the barriers to financing that most women entrepreneurs face. Until that happens, woman-owned businesses won’t grow at the speed and to the levels they could. Sadly, that will impact all of us.

Emilia DiMenco is president and CEO of the Womens Business Development Center, a Chicago-based economic empowerment organization serving a nine-state Midwest region, which provides programs and services to prospective, emerging and established women business owners. For more information, visit

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Bringing Water to the Women’s Capital Desert

chadwell-tracy-picTracy Killoren Chadwell, Founder and Partner of 1843 Capital, WIPP Friend

Water makes things grow. Capital makes companies grow. Companies grow jobs.

If job growth is a priority for the U.S. government, then investing in women led startups should be a priority. Women led startups are one of the highest growing categories for job growth. Women start 1,000 businesses every day. Women have added 1,290,245 jobs over the last 10 years. They contribute $1.4 Trillion dollars in receipts annually to the U.S. economy. According to BusinessDynamics Statistics (U.S. Census) existing companies are net job killers (1 million per year) and startups are net job growers (more than 3 million per year). Women are the gardeners and women are starting companies at 1.5 times the average rate.

Women founded companies are seeing a tremendous amount of support at the seed stage. Women focused incubators, accelerators, grant programs, mentors, seed investors and grant programs are in place. They are doing a great job of getting the seeds planted and the companies’ roots to take hold. However, there is a big component missing. The capital is lacking to take the companies from seed stage to a place where they can achieve profitability. Companies reach a place where they are finding traction, gaining customers and hiring people and they are left to wither for lack of funding. Venture capital, the traditional source of capital to grow, goes disproportionately to companies that have all male teams. According to the Diana report, women led companies only receive 3% of total venture capital dollars. 97% goes to male teams. Researchers at the MIT Sloan School, Harvard Business School, and Wharton Business School found that, given the same pitch, men were 40 percent more likely to receive funding than a woman presenting the same pitch. Some may argue that the companies led by men are somehow “better.” We finally have great data that says that isn’t true. A study by First Round Capital, of 300 of it’s portfolio companies, shows that a company with at least one female founder on the team outperformed the traditional all male companies by 63%. A study by Stamford University shows that female led venture backed companies out perform by 35% and have 12% more revenues.

The story on the debt side isn’t any better. Women led businesses received 4% of commercial loans. Loan approval rates for women owed companies are 15-20% lower than for companies with traditional all male teams. When they do get access to loans, they are often subject to higher interest rates.

Amazingly enough, high growth women led companies are not all technology based (although a wise woman once said “all businesses are technology businesses”). They are health care, service, manufacturing and consumer products, every garden variety.

The solutions to this problem are readily accessible. We can empower more female fund managers with capital. We can expand business education and counseling for women. We can change the way credit is created and monitored. We can support and expand small business lending. Women traditionally have achieved so much more with less. On average, women grow their businesses with less than half the capital than men. A little water will yield a bumper crop of new jobs.

Uncle Sam, Mrs. American Startup is here to rescue you. All we need is a little water for the desert.

Tracy Killoren Chadwell is the Founder and Partner of 1843 Capital, an early stage venture capital fund focused on women led companies. 1843 was the year Ada Lovelace (the only legitimate daughter of Lord Byron) wrote the first computer program.

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Access to Capital – Critical for Business

mullins-thompson-sallie-picSallie Mullins-Thompson, Principal, Sallie Mullins Thompson CPA PLLC, WIPP Member

Over the past 20+ years, while conducting my accounting, tax preparation, financial planning, and business management consulting practice, I have had the opportunity and pleasure to work with and mentor the owners of many small businesses – the majority of which have been women.

Time and time again, I find that even though women business owners are fabulous entrepreneurs with high levels of skills, education, and experience in their profession or industry, they are not always given the same chances, as compared to male business owners, particularly in the area of access to capital. The statistics in this area are quite disheartening; for example in 2013, less than 1 in 3 loan applications for women-owned firms were approved and resulting in only 4.4% of the total dollar value of all small business loans.  That’s $1 out of every $23 being loaned to small businesses.

I wonder why that is, given that women-owned small businesses (WOSBs) constitute close to 40% of all small businesses, generate over $1.6 trillion in gross revenues, are growing at four times the rate of men-owned business, and employ approximately 9 million people. Thus, these WOSBs have a huge impact on the economy, especially as it continues to recover from the 2008 recession.

Having capital to start or grow a business is extremely critical. As a matter of fact, not having enough cash is the major reason small businesses fail or are unable to move to the next level. So, as many agree, since small businesses are the economic engine of the economy and WOSBs represent over 1/3 of that population, then I think that the major federal candidates running for office in the upcoming 2016 election need to be talking about the access to capital for women entrepreneurs.

After all women generally vote in higher numbers than men, with the increase growing larger in each election cycle. Plus, women currently make up a majority of the electorate at 51%. Therefore, women are a constituency that these candidates should want to hear from. And, it’s up to us to make sure they do!

WIPP has put together a most impressive program of action in its Economic Blueprint. Check out the Access to Capital Principles section to learn more about these comprehensive policy solutions. Then, let’s see if we can begin the process of changing the conversation of the 2016 candidates as Election Day draws nearer.

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Access to Capital – Cut the Red Tape

Coins and plant, isolated on white background

Concept of a plant and a lot of golden coins isolated on white background

By Jeanette Prenger, President, EccoSelect, WIPP Board Member

Twenty years ago I founded my company in a way that a lot of entrepreneurs do when entering the service industry; I created a business plan to provide services in a field that I had a lot of experience in – IT. Growing up as a software engineer and earning promotions into management gave me the confidence that I could offer the same type of service as more expensive firms supplying contractors in technology. I was my first billable contractor and did not quit my ‘day job’ until I had the security of knowing I would still have a paycheck coming into our household. By paying myself a salary similar to what I was earning in corporate America and saving the profits, I was able to self-fund a dozen contractors over the next year.

Fast forward twenty years later. We have several million dollars available in a line of credit. I still own 100% of my company but I have a dilemma. In order to accelerate into the next level, I need to look at funding mechanisms other than my line of credit. Those dollars are already spoken for by our accounts receivable.

So what’s the problem? Banks are hesitant to provide traditional loans to grow businesses if the business can get funding elsewhere. The SBA provides loans, of which I leveraged after 9/11, but the price was high. The interest was over 7%, the paperwork extremely time consuming and required outside assistance to help make sure that we could get a loan needed to cover losses incurred by bad receivables.

I’ve seen other companies similar to flourish with a couple of observations. One, they had investor money put into the company and the culture was driven by a quick ROI back to the investors. Ownership was diluted but the investments allowed the company to hire the type of expertise needed to grow the business. Secondly, the businesses had executives who understood how to access capita including what was needed was preparation, where to go and what the risk / rewards could be.

As a woman and a minority, my education did not prepare me to go the route of seeking investors. Nor, do I really understand how to navigate through all the red tape that banks have discussed with me if I want to borrow money to acquire another business similar to mine. Education, especially to small business owners and to disadvantaged businesses (minority, women, vets….) through the SBA, local banks, and community banks on how we can grow businesses with shared risk would be a tool that many businesses would welcome. Banks and traditional lenders were already risk adverse prior to the new regulations and oversight that have caused them to decrease loans to small businesses for growth. They are hesitant to assist in providing education to actually gain capital and yet banks, and the government, bail out big businesses.

Our elected officials need to look at the stimulus they could facilitate if small businesses and disadvantaged businesses had access to capital. If incentives were given to lenders to educate businesses about loans, the types that work best for their companies and actually provided the capital needed.

If small business is truly the ‘engine of our country’ let’s provide some fuel!

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