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Saturday, Feb 15, 2025

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Question: I started my own medical-billing company in the early 1980s. Like many other women small-business owners, I have been snubbed many times by traditional lenders. For years, I have funded my business through personal loans and credit cards, and borrowed money from family and friends. Today, our annual revenues are about $250,000. I think the time is right to grow my business, but we need new computers and an upgrade in staff. That takes money. Do you think, with capital being so readily available, I have a shot at getting financing from a bank?

Answer: Times have never been better, especially for women entrepreneurs. Banks right now appear to be having a love affair with women. There are new billion-dollar lending programs aimed at women business owners. I’m actually surprised that you haven’t been barraged with letters and phone calls from your local banker begging you to apply for a loan.

Finally, bankers have acknowledged that women in business are powerful. How could they not! There are 8 million women-owned firms in the United States today. And collectively, they generate more than $2.3 trillion in annual sales. Many of them are service businesses like your own.

Two California banks you should contact are Wells Fargo Bank which has recently set aside a $10 billion program targeted at women-owned companies and Bank of America, which has a similar program.

One thing leading to the improvement in the small-business loan environment is that banks have cut back the paperwork to make applying easier, compliments of computer technology for checking credit.

The Wells Fargo Women’s Lending Program has made a commitment to finance eligible businesses. Here are some facts about the program:

– You must have less than $5 million in annual sales and fewer than 100 employees.

– While no collateral is required, it certainly wouldn’t hurt.

– Fixed-rate and floating-rate loans are available. Maturity dates are flexible.

– The average rates being charged as of this summer were 1.75 percentage points above prime rate, ranked by risk factors.

– The application form is a one-pager for loans and lines of credit up to $50,000.

The Advantage Business Credit Program at Bank of America wasn’t intentionally designed to entice women business owners, but it does market to them directly. Some facts you might want to know are:

– In 1996, as part of an almost $11 billion commitment to entrepreneurs, BofA lent more than half that amount $6.6 billion. It has been estimated that female owners can expect to get about 40 percent of that amount.

– To be eligible, your business must have less than $10 million in annual sales and be headquartered in states where the bank has offices (obviously, California meets that requirement).

– The average rate charged by BofA has been about 13.4 percent, also as of late summer.

Of course, the more things change, the more they stay the same. In that regard, small-business loans will always be more expensive, both in fees and in interest rates charged.

Question: My sister and I run a small publishing business here in Los Angeles. With more than 50,000 books published every year, the business is getting tougher and more competitive all the time. Marketing is key to selling books and though we never really advertised before (except in trade publications) we are thinking about spending more money in this area. Remember, we are a small company and the publishing business doesn’t have great margins. What do you recommend we do to get the most out of our advertising dollar?

Answer: I know exactly what you mean! Besides thinking about how to save money on advertising, it is even more important to think about how to develop money-producing ads.

The headline is the critical part of any ad. It needs to scream out the benefits to the reader (if print) or audience (if broadcast). If it doesn’t get their attention immediately, why should they even bother reading the rest of the ad?

Too many small businesses (whether they’re working with an agency or not) tend to create headlines that are warm and fuzzy, mostly because that looks, feels, and sounds nice. Wrong. While adorable or witty, a feeble attempt at humor or innuendo might turn your audience off. Even worse, you could insult them.

Here are a few suggestions. Write your headline last. After you draft the body copy for the ad, you might discover a great headline buried in the text. Plus, if you write the headline first, you might limit what you can say in the ad copy.

Before writing good money-producing ads, ask yourself some questions, like:

– Who is your target market? Make sure the ad is designed for that audience.

– How can your target market benefit from your product? After you determine what the benefits are, write them into the ad.

– Can you support the benefit claims you make in the ad? If so, write motivating body copy that will prompt the reader/listener to contact you for more information (or even better, to make a purchase).

Before you buy ad space, test out the headline and copy on a sampling of your customers. Ask them to tell you how they would respond to this advertisement if they saw it in a magazine or heard it on the radio or television. If they’re not motivated by the ad, ask them how it could be changed for the better.

Remember to include your phone number, address, Web site or some other way for people to get in touch with you. If the headline and copy are a success, you want to be able to capitalize on your efforts.

Lorraine Spurge is a personal finance advisor, author and business news commentator. She can be reached a (818) 705-3740 or by e-mail at [email protected].

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