Here's what you should do when starting your own business, according to the Small Business Administration Be aware of the many different laws and regulations you must comply with Decide on your business structure Don't give up when something isn't working Be comfortable with uncertainty and a lack of security Be willing to change your perspective at a moment's notice and act quickly

Georgia small business lending at an all-time high

Lending for small businesses is at an all-time high in Georgia, yet some still struggle to access credit.

In many cases, the explanation is pretty simple, according to Drew Tonsmeire, the area director at the UGA Small Business Development Center at Kennesaw State University.

“It’s really not the size, but the age of the business,” he said. The older a business is, the more there is for a lender to evaluate to ascertain creditworthiness.

A recent report released by the Georgia Small Business Administration shows $1.41 billion in loans issued in the state last year. In the last two quarters ending March 31, $650 million in loans were disbursed to small businesses statewide.

“The lending environment is much better than it was 10 years ago,” said Tonsmeire, adding that businesses are able to access different sources of funding other than banks, such as SBA loans and business lines of credit from online lenders.

The nearly 1 million small businesses in Georgia employ some 1.5 million people and account for nearly a third of the state’s exports, according to the International Trade Association. The businesses provide 44 percent of the private sector jobs.

Dean Bird, Atlanta small business banker manager at Bank of America, says access to funding helps small businesses launch new projects, expand operations and hire more people.

“Ultimately, capital is one of the key ingredient in turning ideas into action,” said Bird.

2017 report by the Federal Reserve Bank showed smaller firms struggling to access credit compared to larger, more established businesses. The report attributed the difficulty to higher costs of lending related to inherent risks associated with small businesses.

Tonsmeire adds that credit issues among applicants and a lack of prior business relationships with lending institutions are some factors leading to loan application failures. He said business owners need to establish dialogue with lenders prior to applying for loans.

“Trying to lend into an unknown capacity is what makes it difficult for a new business to get access to capital,” he said.

Lending for small businesses- the drivers for local economies- improving steadily nationwide. TERRY HAGERTY/ FOR BASTROP ADVERTISER NOV. 25, 2017
Photo: The Atlanta Journal-Constitution

Women still have more of a disadvantage when it comes to securing business loans.

According to the U.S. Department of Labor, there are close to 10 million female-owned businesses in the nation, which account for $1.4 trillion in receipts.

Nationwide, only 27 percent of women who applied for funding in the first quarter of 2018 were approved compared to the overall success rate of 42.6 percent, according to a study conducted by the Pepperdine Graziadio Business School in conjunction with research firm Dun & Bradstreet. And that’s an improvement from last year’s 15 percent.

“Most banks think they are fairly gender-lined, but the facts don’t really bear that out,” said Craig Everett, director of the Pepperdine Private Capital Markets Project. Everett said women’s success rates are “still not up to where men are.”

Daphne Bryson Jackson, the principal of GovLink, a construction consulting firm in Atlanta, sees the low approvals as a factor contributing to the low number of women in fields such as construction, which have high capital requirements.

“No matter where you go, the issue of women being underserved in most industries exists,” said Jackson.

Tonsmeire, however, argues that challenges in borrowing are mostly related to individual credit issues, adding that banks have to follow their own regulatory and lending rules before approving a loan.

“The success rate is dependent on an individual business owner understanding their own credit,” he said.

As the nation marks small business week, a newly released Bank of America report showed Georgia headed for the strongest small business growth forecast since 2014, with 81 percent planning expansions in the next five years.

“Local small business owners feel positive about tax reform and are excited by the potential of emerging technologies creating more opportunity for business growth,” said Dean Bird, the Atlanta small business banker at Bank of America.

According to the report, 36 percent of small business owners plan to hire more employees in the next 12 months.

Tonsmeire said such a forecast provides opportunities for banks to increase their loan portfolios and make loans accessible to applicants.

“It just makes good economic sense for the lending community to increase their sales by increasing their lending to small businesses,” he said.

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