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When the Banker Says "NO"

"We small business onwers are creative. When we decide we want to do something, we figure out how to do it. Bill Tobin started in business by borrowing his mother's credit card to buy his first lawn mower. I borrowed from my father in 1979 and had to pay him back with 18% interest because that was what his savings were earning in the money market ."
- Hattie Bryant

HattieThroughout the world. Every entrepreneur has money problems. In this episode you learn how many successful business owners were able to find startup funding for their business, especially after a banker said, "No." Not one of these companies got a startup loan from a bank. Each owner used creative thinking to find money in unexpected places.

Lightbulb: Prepare to visit the bank. If you are just starting out in business, approach a bank after working with your local Small Business Development Center. They will teach you how to put your plan in writing and how to talk to a banker. However, if you've been in business for over a year and you have kept decent records, you can now go to a bank and establish a line of credit or even get a traditional loan. Banks and banking are changing; they need you. And once you have paid your dues and proven your idea works, you will need a solid relationship with a banker. In fact, without this, you may stunt your growth even though you are achieving your initial goals.

Geoff AllenGeoff Allen has worked hard and long all of his short life. He got his first job at McDonald's when he was just 14 and was in charge of the computer. When he discovered he was making less per hour than the new employees who were over 21 he complained. Nothing changed so he went to work for another employer who had troube paying Geoff what he was worth because he was just too young. By saving and living at home with his parents, he had his own cash to get started in business.


Tom GegaxTom Gegax started his business with $15,000 he had in a retirement account and as he tried to grow it, he was turned down by 16 banks. Today this company, Tires Plus, has over 1800 employees selling tires from 150 locations and generating revenues of nearly $200 million. He sold the business in 2003 and today is a wealthy man.

Here's what we learned from this episode...

  • Age, race and gender have nothing to do with a person's ability to start and grow a successful company.
  • Timing is critical and you may have to create your own timing.
  • If you don't have money to hire employees, form strategic alliances.
  • Communication skills are imperative.
  • The SBA and SBICs (Small Business Investment Companies) have special programs.
  • There is no such thing as a start up business loan from a bank. A start up loan is always made to an individual.
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We invite your questions or comments. 

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