KOFE TALK – One Cup of Coffee with Small Business Credit Expert Gerri Detweiler

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thank you for tuning in to another

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edition of coffee talk today we have

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credit expert jerry detweiler with us

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jerry has been interviewed in more than

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4 500 news stories and answered over 10

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000 credit questions

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her articles have been widely syndicated

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she’s the author or co-author of five

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books including finance your own

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business get on the financing fast track

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she’s a former education director for

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nav which is a website and service that

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helps make business financing simple

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jerry has also hosted her own radio show

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and testified before congress on

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consumer credit legislation

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welcome jerry

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oh thank you april i’m glad to be here

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oh i’m so happy to have you here um and

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we’ve known each other for many many

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years and i know you’ve been in the

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personal finance space for such a long

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time but i’d love to know how you got

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started in writing talking about and

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teaching people about money and credit

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yeah i fell into my first job in the

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washington dc area years ago uh working

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uh with a consumer advocacy organization

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that was focused on credit and it was a

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really interesting time to be involved

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because i as you mentioned in my intro i

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got to work on legislation that gave

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consumers free credit reports way back

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in the day and the legislation that

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tells you what your credit card will

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cost before you get it in the mail in

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the old days you’d get a credit card and

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then you’d find out what the annual fee

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and interest rate was so it’s super

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interesting to uh to delve into those

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issues and then about 10 years ago i

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shifted a little bit more toward the

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small business audience and

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interestingly the small business

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audience um they don’t have the same

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consumer protections generally that that

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we do as consumers so a great example is

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california just passed the first law

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that will require a small business loans

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to carry an apr an annual percentage

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rate that’s what we use to compare auto

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loans and mortgages and credit cards but

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that hasn’t been a fact in the small

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business world so it’s it’s fun to work

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on the intersection between consumer and

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small business

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wow i think that’s fascinating so if

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they don’t go by aprs for

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startups and business loans what do they

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use as the metric for interest or do

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they use standard credit reporting tools

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or how does that work oh it’s so

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different april

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it’s so different uh i on the on the

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disclosure side uh most banks and credit

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unions they will use an apr that’s what

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they’re used to and that’s also what

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their customers are used to but when you

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get off to the fintech world or the

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financial technology world sometimes

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you’ll see very different terms used to

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express costs so they might say for

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example a fee and they’ll give you the

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amount of the fee but you don’t know how

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that compares to an interest rate say on

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a credit card or another small business

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model and i’ll give you a real quick

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example there was a story in forbes a

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couple of years ago of a woman who was a

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hairdresser and she was going to buy the

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salon

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from the owner who was selling she got

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some financing offered she got a term

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sheet and it said 15

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i think it said stated percentage so in

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her head she’s thinking 15 interest rate

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that’s not bad

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but when it was put into a calculator

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that translated it to an apr

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guess what the apr was

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no idea

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over 4

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000 apr what

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yeah so that’s not that’s not a typical

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example but

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there are a lot of small business

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financing products that do have

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equivalent aprs of anywhere from 30 to

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100 percent

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and uh if the business owner doesn’t

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really understand it or doesn’t really

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understand how that impacts their cash

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flow they can end up in a very

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precarious situation i can see why i

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mean that’s kind of flabbergasting to to

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me since i’ve been on the consumer

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credit end of it to hear that business

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owners have such different rules um so

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since you know we’ve gone through this

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pandemic and we’re still going through

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it but there’s been a new generation of

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entrepreneurs you know statistics show

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that more people started their own

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business than ever before during the

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pandemic um so what would you say is the

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number one pitfall that people go

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through or have happened to them that

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they don’t prepare when they’re starting

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a new business

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well i’d say the number one challenge

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for most small business owners is that

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they’re starting a business because

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they’re passionate about something they

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either love or they’re good at so

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they’re good at they’re good at being a

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hairdresser

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they’re passionate about environmentally

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friendly products whatever it may be

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no matter what your business is you’re

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going to have to deal with the finances

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and it’s

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it’s different for business than

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consumers you’re going to have to

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to navigate the myriad regulations that

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you have to navigate as a small business

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owner how do you pay your taxes um what

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licenses do you have to have how do you

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pay for a payroll and how do you make

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sure that the payroll taxes for your

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state get paid on time there’s a lot of

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financial details that if you’re not if

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you’re not setting it properly from the

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beginning

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you’re going to regret it later and the

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other thing is when it comes to finances

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typically if you have a job and your

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employer doesn’t pay you that’s very

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serious right that you have the

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department of labor your state

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department of labor who get involved but

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as a small business owner it’s very very

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common for invoices to clients or

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customers

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to take a long time to get paid so you

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don’t actually make money in your

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business until that money is deposited

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in your account and i had this happen to

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me i was self-employed for about a

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decade

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after i left the advocacy group and i

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had a business partner who had a great

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reputation well known in the industry

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got involved and

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we created a product together he sold it

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and he never paid me and

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i know i was owed at least forty

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thousand dollars from this project that

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i never saw and i saw an attorney and

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the attorney said you know hey um you

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can hire me but you’re probably going to

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throw good money after bad because it’s

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hard to collect these invoices

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so it’s very very important for you as a

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business owner if you are

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providing anything worth value without

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getting paid up front whether it’s your

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goods your services whatever it may be

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that you also think like a lender you

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know what do lenders do lenders check

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credit right lenders get references

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a lender you know you might not qualify

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for if you’re uh have a brand new

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business for example so you can do the

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same thing as a business owner you can

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check business credit on the clients or

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the customers that you plan to

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get involved with and if you see red

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flags you might say you know what i need

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to deposit upfront or i need to get paid

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in full upfront or you might even decide

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not to work with that client because you

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just don’t want to deal with the hassle

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of late payment so just a little tip but

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it’s one that i experienced personally

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and i see it time and time again with

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businesses where cash flow is a real

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concern

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wow it’s just so it’s kind of outrageous

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right that you give your services and

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you have this arrangement and then don’t

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get paid

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yeah and i can imagine a lot of business

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owners having to chase down people to

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get their payments so yeah that’s a

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definitely a good thing to let people

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know and to think about now let’s talk

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about loans specifically the best small

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business loans

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what kind of loans are there uh

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available for small businesses

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there are so many different loans

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available for small businesses now so

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you they range all the way from going to

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your local bank or credit union to

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getting a loan that’s guaranteed by the

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small business administration to many

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different types of online lenders and

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what i usually tell small business

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owners is hey if you can qualify for a

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loan from your credit union or your bank

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go for it because that’s probably going

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to be the best money that you can get

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now there are also financial

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institutions that work with the sba they

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because the sba generally doesn’t make

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loans it just guarantees them

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the disaster loans that many businesses

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got during the pandemic were a bit of an

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exception and disaster loans do go

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directly through the sba but usually you

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go to an individual lender and that

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lender will work with you to see if you

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qualify for an sba guaranteed loan

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because there is that guaranteed element

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they can offer attractive interest rates

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a little bit less risk to the financial

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institution so you still have to qualify

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and generally the sba wants to see that

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you have acceptable credit and

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wants to make sure that you have the

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cash flow to repay the loan

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if you’re a startup then you’ll need to

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demonstrate how you’re going to generate

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the cash flow to repay the loan and the

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lender has to feel comfortable with that

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so it’s not a giveaway you know it’s

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something that you qualify for

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but if you don’t qualify for that type

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of financing and many small business

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owners don’t especially startups

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as well as a lot of economically

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disadvantaged borrowers then you have to

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get more creative and one place to look

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i mean that that’s what nav does where i

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worked for many years and have matches

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small business owners to to small

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business loans and another option to

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take a look at in your community if you

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need a small amount of money especially

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to get started and the startup funding

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is challenging to get i won’t sugarcoat

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it it is hard to get because

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you don’t have the track record but

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there are um what are called micro

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lenders um throughout the united states

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these are often community development

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financial institutions non-profit

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lenders

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and they

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may make small loans

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uh usually less than fifty thousand

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dollars in the sba micro loan program

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it’s about fifteen thousand dollars and

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the terms are usually quite good and

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they come with something called

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technical assistance where they will

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work with you to try to make sure your

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business is successful so if you are

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starting a business you’ve been thinking

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about starting a business

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my best tip for you i have two tips one

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is to make sure you establish a business

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bank account business checking account

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doesn’t have to be from a bank but you

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need a business checking account and

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then the second is to connect with your

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local sba resource partners so if you

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just go to sba.gov

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right on the front page you’re going to

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see information about getting help there

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are free

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mentoring there’s free mentoring

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available

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through sba partners across the country

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and this is such an um a hidden resource

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that so many business owners don’t take

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advantage of but should and they may in

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addition to helping you get your

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business off the ground helping with

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your business plan help your business

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grow they may also be able to help

0:10:52.079,0:10:56.320
connect you to

0:10:53.680,0:10:57.519
local resource partners including micro

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lenders

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that’s wonderful information i mean i

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really

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don’t think a lot of people are aware

0:11:02.079,0:11:07.600
that that’s available and do you know do

0:11:04.800,0:11:09.440
they also work with score i mean i’m

0:11:07.600,0:11:11.760
sure you’re familiar with score do you

0:11:09.440,0:11:13.519
want to tell um the listeners like what

0:11:11.760,0:11:15.519
score is basically because it’s another

0:11:13.519,0:11:17.440
great resource that i don’t know that a

0:11:15.519,0:11:20.000
lot of people are aware of

0:11:17.440,0:11:22.320
yeah so score is one of the sba resource

0:11:20.000,0:11:24.160
partners that you will find on the sba

0:11:22.320,0:11:26.880
website and they are also a non-profit

0:11:24.160,0:11:30.240
organization and they are

0:11:26.880,0:11:32.959
they provide free business mentoring

0:11:30.240,0:11:34.560
usually from retired entrepreneurs

0:11:32.959,0:11:36.160
sometimes people are still working and

0:11:34.560,0:11:38.320
they just want to give back and be part

0:11:36.160,0:11:40.480
of the entrepreneurial ecosystem but

0:11:38.320,0:11:42.800
that you will be assigned a score mentor

0:11:40.480,0:11:44.480
who will help you with various aspects

0:11:42.800,0:11:46.720
of your business whether that’s trying

0:11:44.480,0:11:49.360
to get a business grant uh creating a

0:11:46.720,0:11:51.440
business plan creating a marketing plan

0:11:49.360,0:11:54.079
uh it’s a great resource and that and

0:11:51.440,0:11:55.839
the small business development centers

0:11:54.079,0:11:58.399
which are not volunteers but they are

0:11:55.839,0:12:01.680
actually employees working for these you

0:11:58.399,0:12:03.519
know sbdcs those two organizations can

0:12:01.680,0:12:05.839
be just invaluable to your business and

0:12:03.519,0:12:08.320
i suggest you reach out to both i i see

0:12:05.839,0:12:10.240
no harm in taking advantage of all those

0:12:08.320,0:12:11.360
great free resources that are available

0:12:10.240,0:12:14.880
to you

0:12:11.360,0:12:16.079
through the you know sba uh sva network

0:12:14.880,0:12:18.959
yeah it’s wonderful it’s great

0:12:16.079,0:12:20.720
information um so another question is

0:12:18.959,0:12:22.880
how does someone determine how much

0:12:20.720,0:12:24.560
money that they should take out alone

0:12:22.880,0:12:27.120
for to start their business is there any

0:12:24.560,0:12:29.120
guidelines to say gosh you know i should

0:12:27.120,0:12:30.720
take out fifty thousand thirty thousand

0:12:29.120,0:12:33.279
a hundred thousand what would your

0:12:30.720,0:12:34.399
advice be when looking at some someone’s

0:12:33.279,0:12:36.399
looking at their business trying to

0:12:34.399,0:12:38.480
figure out what’s the amount

0:12:36.399,0:12:39.680
yeah it is a balance and it’s a balance

0:12:38.480,0:12:42.639
between

0:12:39.680,0:12:44.639
um not too much and not too little uh

0:12:42.639,0:12:48.240
because that is one trap that some

0:12:44.639,0:12:50.000
businesses will fall into is they will

0:12:48.240,0:12:52.240
want to borrow a certain amount of money

0:12:50.000,0:12:53.200
but they’re afraid to ask for too much

0:12:52.240,0:12:55.040
and then

0:12:53.200,0:12:56.880
the lender might look at it and say you

0:12:55.040,0:12:58.720
know what this is enough for them to

0:12:56.880,0:13:00.639
accomplish what they plan to accomplish

0:12:58.720,0:13:03.200
they’re going to be back here in three

0:13:00.639,0:13:05.839
or six months asking for more money and

0:13:03.200,0:13:07.519
that could hinder their cash flow so two

0:13:05.839,0:13:09.279
things i would suggest there one is your

0:13:07.519,0:13:12.240
business plan is going to help inform a

0:13:09.279,0:13:14.560
lot of you know what you need uh to get

0:13:12.240,0:13:16.399
started or to grow your business

0:13:14.560,0:13:18.720
financing often takes place as a

0:13:16.399,0:13:21.279
business goes into growth mode and those

0:13:18.720,0:13:22.639
business mentors that i talked to along

0:13:21.279,0:13:24.320
with um

0:13:22.639,0:13:26.000
an accounting professional who works

0:13:24.320,0:13:28.160
with small business clients though that

0:13:26.000,0:13:30.560
combination can be very valuable to help

0:13:28.160,0:13:32.240
you nail down that sweet spot between

0:13:30.560,0:13:34.160
making sure you have enough but you

0:13:32.240,0:13:36.240
don’t get your business in a place where

0:13:34.160,0:13:37.519
you’re overextended and for each

0:13:36.240,0:13:39.120
business it’s going to be a little bit

0:13:37.519,0:13:40.880
different so again drawing on the

0:13:39.120,0:13:41.839
experience of those mentors and making

0:13:40.880,0:13:43.760
sure

0:13:41.839,0:13:47.760
that you build in enough for the

0:13:43.760,0:13:50.639
unexpected because clients will pay late

0:13:47.760,0:13:53.040
the economy will change as we know we’re

0:13:50.639,0:13:54.800
in the middle right now of 2022 and no

0:13:53.040,0:13:56.880
one knows when and if a recession is

0:13:54.800,0:13:59.120
coming supply chain issues are affecting

0:13:56.880,0:14:01.279
many small businesses inflation is a

0:13:59.120,0:14:03.199
concern for small businesses

0:14:01.279,0:14:04.800
those kinds of things you know they come

0:14:03.199,0:14:07.040
up all the time we don’t know what’s

0:14:04.800,0:14:08.240
next so you do have to build it enough

0:14:07.040,0:14:11.199
so that you can make sure that those

0:14:08.240,0:14:12.959
payments continue to be to be paid

0:14:11.199,0:14:15.440
going forward so you don’t hurt your

0:14:12.959,0:14:17.839
business credit um and so with the sba

0:14:15.440,0:14:19.120
and score do you know that if that

0:14:17.839,0:14:20.880
those groups would maybe help

0:14:19.120,0:14:23.279
entrepreneurs determine

0:14:20.880,0:14:24.480
how much money they should take like do

0:14:23.279,0:14:25.440
they do that

0:14:24.480,0:14:26.959
as well

0:14:25.440,0:14:28.639
yeah they can help with financial

0:14:26.959,0:14:30.320
planning and financial

0:14:28.639,0:14:31.839
not in personal financial planning but

0:14:30.320,0:14:34.399
financial planning for the business in

0:14:31.839,0:14:37.040
terms of um the projections

0:14:34.399,0:14:38.560
that you may need and some lenders

0:14:37.040,0:14:40.320
particularly traditional financial

0:14:38.560,0:14:42.240
institutions will want to see

0:14:40.320,0:14:44.880
projections the projections for your

0:14:42.240,0:14:46.480
business going out maybe six months to

0:14:44.880,0:14:48.480
determine you know do you have enough

0:14:46.480,0:14:50.720
money to repay this loan that we’re

0:14:48.480,0:14:52.880
going to extend to you right okay all

0:14:50.720,0:14:54.079
right good to know um and so now that we

0:14:52.880,0:14:56.079
talked a little bit about how to take

0:14:54.079,0:14:58.079
out the right loan and what to look at

0:14:56.079,0:15:00.800
and who to go to for advice you’ve

0:14:58.079,0:15:01.760
mentioned recession so you know that’s

0:15:00.800,0:15:03.839
what everybody’s talking about

0:15:01.760,0:15:06.000
everybody’s thinking about right now so

0:15:03.839,0:15:08.240
how would you advise somebody or any

0:15:06.000,0:15:10.639
tips about recession proofing your

0:15:08.240,0:15:12.880
business as much as possible because

0:15:10.639,0:15:14.560
inflation interest rates and i’ve heard

0:15:12.880,0:15:16.800
many lenders already talking about

0:15:14.560,0:15:18.959
preparing for the next recession and you

0:15:16.800,0:15:20.399
know the one thing you can bet on is

0:15:18.959,0:15:22.560
when recession

0:15:20.399,0:15:24.639
talk comes around they tighten the

0:15:22.560,0:15:27.120
lending standards usually so what would

0:15:24.639,0:15:29.199
you advise for people to do now

0:15:27.120,0:15:31.120
yeah so if you have a small business

0:15:29.199,0:15:33.680
right now one thing i would encourage

0:15:31.120,0:15:36.240
you to do is think about um making sure

0:15:33.680,0:15:38.480
that you at least have a line of credit

0:15:36.240,0:15:39.600
lined up that’s like one of the most

0:15:38.480,0:15:42.320
popular

0:15:39.600,0:15:44.079
types of financing for small businesses

0:15:42.320,0:15:46.639
and it allows you to borrow when you

0:15:44.079,0:15:47.759
need it repay it go back to the well

0:15:46.639,0:15:49.839
again

0:15:47.759,0:15:51.519
and really look at go ahead i was just

0:15:49.839,0:15:54.000
going to ask is a line of credit

0:15:51.519,0:15:56.480
typically around the same interest rate

0:15:54.000,0:15:58.399
as a small business loan would be or are

0:15:56.480,0:16:00.240
there variations or i don’t know if you

0:15:58.399,0:16:02.240
can speak to that at all if it’s sort of

0:16:00.240,0:16:03.600
comparable or one is better interest

0:16:02.240,0:16:05.920
rate than another

0:16:03.600,0:16:08.399
yeah so lines of credit are short-term

0:16:05.920,0:16:10.320
loans and they are typically unsecured

0:16:08.399,0:16:12.000
typically there’s not collateral though

0:16:10.320,0:16:14.399
there could be there could the lender

0:16:12.000,0:16:16.240
could ask for collateral uh for a line

0:16:14.399,0:16:18.560
of credit as well as any other type of

0:16:16.240,0:16:21.440
business loan um the interest rates are

0:16:18.560,0:16:23.519
usually variable and often there is an

0:16:21.440,0:16:25.680
and and it depends on your

0:16:23.519,0:16:28.160
qualifications the industry that you’re

0:16:25.680,0:16:30.079
in your credit all those time of

0:16:28.160,0:16:32.000
business those factors are all important

0:16:30.079,0:16:34.079
in any kind of small business

0:16:32.000,0:16:36.079
lending so what you get will depend on

0:16:34.079,0:16:38.160
where you go again banks and credit

0:16:36.079,0:16:40.480
unions tend to offer the lowest interest

0:16:38.160,0:16:42.160
rates but they do they can be sometimes

0:16:40.480,0:16:44.959
hard to qualify for for certain

0:16:42.160,0:16:47.199
businesses so i would definitely start

0:16:44.959,0:16:50.000
there um to see whether you qualify for

0:16:47.199,0:16:52.720
that financing otherwise you may look at

0:16:50.000,0:16:54.959
online lenders and fintech lenders which

0:16:52.720,0:16:56.320
will typically carry somewhat higher

0:16:54.959,0:16:57.680
interest rates sometimes much higher

0:16:56.320,0:17:00.399
depending on your you know your

0:16:57.680,0:17:02.079
businesses qualifications but it will be

0:17:00.399,0:17:04.400
a variable interest rate and sometimes

0:17:02.079,0:17:06.880
there’s interest only payments so you’ll

0:17:04.400,0:17:08.880
only be paying interest and then at some

0:17:06.880,0:17:11.280
point the loan will go into full

0:17:08.880,0:17:12.720
repayment and your your payments will

0:17:11.280,0:17:14.880
increase we saw this in the mortgage

0:17:12.720,0:17:16.720
industry right in 2008 when a lot of

0:17:14.880,0:17:18.640
people suddenly their mortgage payments

0:17:16.720,0:17:20.880
skyrocketed because they had to repay

0:17:18.640,0:17:22.400
the whole interest only loan that they

0:17:20.880,0:17:24.240
have been paying and that same thing can

0:17:22.400,0:17:26.559
happen in the business world in the

0:17:24.240,0:17:28.640
business world wow it’s sort of i guess

0:17:26.559,0:17:30.640
it’s a great tool to be able to have it

0:17:28.640,0:17:32.480
available if you really know your

0:17:30.640,0:17:34.880
numbers and you really feel confident

0:17:32.480,0:17:37.360
that when that full interest rate comes

0:17:34.880,0:17:39.039
due and the payment is there that you’re

0:17:37.360,0:17:39.840
gonna have enough revenue to satisfy

0:17:39.039,0:17:42.240
that

0:17:39.840,0:17:43.840
um so and let’s talk a little bit about

0:17:42.240,0:17:46.240
cash flow because i know cash flow is

0:17:43.840,0:17:48.320
critical um in personal life but

0:17:46.240,0:17:50.720
especially in business do you have any

0:17:48.320,0:17:52.799
advice for people starting a business

0:17:50.720,0:17:56.080
what to watch out with their cash flow

0:17:52.799,0:17:57.919
any sort of i don’t know best practices

0:17:56.080,0:17:59.440
yeah so when we’re talking about cash

0:17:57.919,0:18:00.799
flow we’re talking about

0:17:59.440,0:18:02.559
the money that’s coming into your

0:18:00.799,0:18:04.480
business the money that’s going out of

0:18:02.559,0:18:06.320
your business and

0:18:04.480,0:18:08.640
one of the best things you can do for

0:18:06.320,0:18:10.240
your business and i i know from

0:18:08.640,0:18:11.919
talking to so many business owners

0:18:10.240,0:18:14.000
during the pandemic that there’s a lot

0:18:11.919,0:18:15.760
of business owners who don’t really do

0:18:14.000,0:18:18.240
this is to stay on top of your

0:18:15.760,0:18:21.360
bookkeeping and to make sure that it’s

0:18:18.240,0:18:23.280
up to date um and you’re frequently

0:18:21.360,0:18:25.360
looking at those numbers just that

0:18:23.280,0:18:26.960
awareness alone is really important it’s

0:18:25.360,0:18:29.039
sort of like personal budgeting if we

0:18:26.960,0:18:31.440
don’t really pay attention we lose track

0:18:29.039,0:18:33.520
of what we really spent our money on and

0:18:31.440,0:18:35.600
did it make sense and what’s coming up

0:18:33.520,0:18:37.679
what you know what when does that annual

0:18:35.600,0:18:39.039
homeowners insurance premium come to or

0:18:37.679,0:18:41.600
whatever it may be

0:18:39.039,0:18:43.280
same thing happens in business and what

0:18:41.600,0:18:45.440
we saw during the pandemic for example

0:18:43.280,0:18:48.240
was a lot of business owners couldn’t

0:18:45.440,0:18:50.240
qualify for the government financing

0:18:48.240,0:18:52.320
because they hadn’t filed tax returns

0:18:50.240,0:18:53.039
they didn’t really have anything to back

0:18:52.320,0:18:55.039
up

0:18:53.039,0:18:57.360
what their business was making or

0:18:55.039,0:18:59.520
bringing in or spending so that’s the

0:18:57.360,0:19:00.960
number one thing is having a bookkeeping

0:18:59.520,0:19:02.559
system that’s kept up to date you can

0:19:00.960,0:19:05.840
work with a bookkeeper you could take a

0:19:02.559,0:19:08.160
class at your sbdc um you know a local

0:19:05.840,0:19:10.000
sbdc and learn how to do bookkeeping

0:19:08.160,0:19:11.440
yourself or you could do a combination

0:19:10.000,0:19:13.840
of the two

0:19:11.440,0:19:16.080
and then once you do that then making

0:19:13.840,0:19:19.120
you know a date with yourself once a

0:19:16.080,0:19:21.200
month to review and see what’s going on

0:19:19.120,0:19:22.720
the one thing you don’t want is you

0:19:21.200,0:19:24.799
don’t want those

0:19:22.720,0:19:27.520
payments that are due to your business

0:19:24.799,0:19:29.360
to draw out too long now in some

0:19:27.520,0:19:31.600
industries you’re that’s just going to

0:19:29.360,0:19:33.520
be the way it is if you do business with

0:19:31.600,0:19:36.320
a big company

0:19:33.520,0:19:39.120
you’re going to expect them to take 60

0:19:36.320,0:19:40.799
sometimes 90 days to pay that’s very

0:19:39.120,0:19:45.039
very common and i’ll tell you a quick

0:19:40.799,0:19:47.200
story april um i i sat at a a conference

0:19:45.039,0:19:51.039
with someone whose business

0:19:47.200,0:19:53.679
is strictly to he lends to businesses

0:19:51.039,0:19:55.919
that do businesses with coca-cola so

0:19:53.679,0:19:57.360
it’s called factoring invoice factoring

0:19:55.919,0:19:59.840
so like if i were doing business with

0:19:57.360,0:20:01.440
coca-cola i’d send them an invoice and

0:19:59.840,0:20:03.039
they would take a while to pay they’re a

0:20:01.440,0:20:05.760
big company they’re good credit risk

0:20:03.039,0:20:07.360
they’ll pay but they have the club to be

0:20:05.760,0:20:09.280
able to take a while while the pay so

0:20:07.360,0:20:11.039
what he would do is advance the money

0:20:09.280,0:20:13.840
more quickly to the business and then

0:20:11.039,0:20:15.679
take a small cut of that as his part of

0:20:13.840,0:20:17.760
the you know financing arrangement

0:20:15.679,0:20:20.400
invoice factoring and financing is very

0:20:17.760,0:20:22.480
common in certain industries so just

0:20:20.400,0:20:24.080
keep in mind that again as we mentioned

0:20:22.480,0:20:25.919
earlier you know

0:20:24.080,0:20:28.240
the money needs to be in your bank

0:20:25.919,0:20:30.640
account and available to you for you to

0:20:28.240,0:20:32.559
be able to spend it and you will find

0:20:30.640,0:20:34.960
that some customers will take longer to

0:20:32.559,0:20:37.600
pay so you need to account for that when

0:20:34.960,0:20:38.960
you’re working in you know working in in

0:20:37.600,0:20:40.880
your books and your cash flow

0:20:38.960,0:20:42.400
projections okay

0:20:40.880,0:20:44.159
yeah it sounds kind of scary i can see

0:20:42.400,0:20:45.760
why people not everyone is an

0:20:44.159,0:20:48.880
entrepreneur because you really have to

0:20:45.760,0:20:51.760
have a lot of i don’t know faith

0:20:48.880,0:20:54.080
business acumen making sure

0:20:51.760,0:20:55.679
all your finances are in line is

0:20:54.080,0:20:57.520
definitely critical

0:20:55.679,0:20:59.840
a lot of businesses even though the

0:20:57.520,0:21:01.360
person is very talented and they’re

0:20:59.840,0:21:02.960
great at what they do sometimes they

0:21:01.360,0:21:05.200
just don’t make it

0:21:02.960,0:21:06.240
because of lack of financial knowledge

0:21:05.200,0:21:08.320
of how to keep their business

0:21:06.240,0:21:11.200
sustainable so yeah i think it’s really

0:21:08.320,0:21:13.520
important um and another thing

0:21:11.200,0:21:15.039
i think that a lot of

0:21:13.520,0:21:18.080
business owners struggle with is

0:21:15.039,0:21:20.960
acquiring new clients and taking care of

0:21:18.080,0:21:22.720
clients and you know marketing dollars

0:21:20.960,0:21:23.840
to get new clients is usually one of the

0:21:22.720,0:21:26.080
top line

0:21:23.840,0:21:28.720
you know expenses for a business do you

0:21:26.080,0:21:30.480
have any advice for people how to invest

0:21:28.720,0:21:32.799
in client relationships so that way they

0:21:30.480,0:21:33.600
can keep their client base and have like

0:21:32.799,0:21:36.320
more

0:21:33.600,0:21:37.919
word-of-mouth referrals or any any best

0:21:36.320,0:21:39.520
practices about keeping your client

0:21:37.919,0:21:42.000
relationships

0:21:39.520,0:21:44.480
yeah so you have to build in time for

0:21:42.000,0:21:46.960
that marketing and i know you know

0:21:44.480,0:21:48.799
having been self-employed um multiple

0:21:46.960,0:21:51.200
times in the past it’s it’s been a

0:21:48.799,0:21:53.039
struggle for me too a lot of my business

0:21:51.200,0:21:54.960
has come word of mouth and actually

0:21:53.039,0:21:57.520
proactively going out there and saying

0:21:54.960,0:21:59.600
hey i’m available for this um it’s not

0:21:57.520,0:22:02.480
fun for everybody sales isn’t fun for

0:21:59.600,0:22:05.520
everybody so you have two options there

0:22:02.480,0:22:08.320
one is to either get better at sales or

0:22:05.520,0:22:10.799
two to hire someone to

0:22:08.320,0:22:12.960
to you know to help you with sales

0:22:10.799,0:22:16.480
these days fortunately there are a lot

0:22:12.960,0:22:19.600
of options for marketing um online that

0:22:16.480,0:22:22.080
will take some money but um perhaps not

0:22:19.600,0:22:25.200
as much as it would to hire someone to

0:22:22.080,0:22:26.799
be a a salesperson for your company so i

0:22:25.200,0:22:28.240
would just say that you know in addition

0:22:26.799,0:22:30.559
to what you what we talked about in

0:22:28.240,0:22:32.559
terms of just the financial basics just

0:22:30.559,0:22:33.840
understanding that that goes with

0:22:32.559,0:22:36.720
part of the territory whether you have a

0:22:33.840,0:22:39.600
consumer product or a b2b business to

0:22:36.720,0:22:41.280
business um product or service you have

0:22:39.600,0:22:43.120
to build in time for marketing because

0:22:41.280,0:22:45.600
that’s the way you’re going to continue

0:22:43.120,0:22:47.840
to grow your business or to protect your

0:22:45.600,0:22:49.760
business against you know losing a key

0:22:47.840,0:22:51.760
client and then suddenly all the income

0:22:49.760,0:22:55.200
dries up and that’s not unusual either

0:22:51.760,0:22:58.000
to have a major client for six months a

0:22:55.200,0:23:01.039
year two years or longer and then if

0:22:58.000,0:23:02.799
they go away suddenly business drops off

0:23:01.039,0:23:05.039
right and then how do you replace that

0:23:02.799,0:23:06.799
oh wow i just feel like you are a funk

0:23:05.039,0:23:08.080
of knowledge i you know there’s so many

0:23:06.799,0:23:09.919
things that we could go over and talk

0:23:08.080,0:23:12.320
about but just to kind of wrap up a

0:23:09.919,0:23:14.640
little bit about what we touched on was

0:23:12.320,0:23:16.400
small business loans right how to find

0:23:14.640,0:23:18.400
the right one and how to do your

0:23:16.400,0:23:20.000
homework and how to figure out which one

0:23:18.400,0:23:22.640
is right for you

0:23:20.000,0:23:24.720
and i think that nav is a great resource

0:23:22.640,0:23:26.799
so thank you for telling our listeners

0:23:24.720,0:23:30.000
about that as well as talking about

0:23:26.799,0:23:32.080
score in the sba because it’s just i

0:23:30.000,0:23:33.280
think that people get overwhelmed if

0:23:32.080,0:23:34.960
they’re just starting a new small

0:23:33.280,0:23:37.440
business and they don’t know maybe that

0:23:34.960,0:23:40.720
these resources are available to them

0:23:37.440,0:23:42.320
and so easy to use you know yeah um yes

0:23:40.720,0:23:43.919
i’ve had friends that have gone to

0:23:42.320,0:23:45.120
school in sva and just had the best

0:23:43.919,0:23:47.360
experience

0:23:45.120,0:23:49.279
there so i really want to let the

0:23:47.360,0:23:50.720
listeners know if you are thinking about

0:23:49.279,0:23:53.520
starting a small business it is a great

0:23:50.720,0:23:56.000
place to start um yes and you have and

0:23:53.520,0:23:57.440
it’s free and it’s free

0:23:56.000,0:23:58.960
you know i think that’s another thing

0:23:57.440,0:24:01.520
people think it’s free

0:23:58.960,0:24:03.279
maybe it’s not that good or right you

0:24:01.520,0:24:07.039
know or you

0:24:03.279,0:24:07.039
a catch what’s the catch

0:24:07.760,0:24:12.000
yes and the truth is we it’s free

0:24:10.080,0:24:13.440
because we pay for it as taxpayers right

0:24:12.000,0:24:15.200
it’s funded through the small business

0:24:13.440,0:24:17.600
administration which our tax dollars

0:24:15.200,0:24:19.440
help support so take advantage of this

0:24:17.600,0:24:20.799
you know a little bit of those taxes you

0:24:19.440,0:24:22.320
send uncle sam is going to help

0:24:20.799,0:24:24.080
entrepreneurs and you could be one of

0:24:22.320,0:24:26.799
them jerry i just want to thank you so

0:24:24.080,0:24:28.400
much for your valuable insights um and

0:24:26.799,0:24:30.640
i’m sure our listeners will be able to

0:24:28.400,0:24:32.559
put into action what we’ve discussed um

0:24:30.640,0:24:34.400
and i’m also excited to let all of them

0:24:32.559,0:24:36.960
know that you can get a free copy of

0:24:34.400,0:24:40.000
jerry’s book finance your own business

0:24:36.960,0:24:41.679
get on the financing facts fast track

0:24:40.000,0:24:44.320
all you have to do is sign up for a free

0:24:41.679,0:24:45.520
nav account the link to get your copy of

0:24:44.320,0:24:48.559
the book will be included in the show

0:24:45.520,0:24:51.039
notes of this podcast so any last words

0:24:48.559,0:24:53.840
jerry that you have for our listeners

0:24:51.039,0:24:55.919
yes i i just super excited to support

0:24:53.840,0:24:58.960
small business owners i’ve been one i’ve

0:24:55.919,0:25:01.360
helped them and i there’s nothing as as

0:24:58.960,0:25:03.279
satisfying as creating something that

0:25:01.360,0:25:05.840
you know provides financial security for

0:25:03.279,0:25:07.840
your family and also helps the community

0:25:05.840,0:25:09.840
and that’s so many entrepreneurs i talk

0:25:07.840,0:25:11.840
to really have a bigger mission they

0:25:09.840,0:25:13.679
really want to help you know others in

0:25:11.840,0:25:15.600
their community and i want to see them

0:25:13.679,0:25:17.360
succeed so hopefully these resources

0:25:15.600,0:25:20.240
will get them started and get them

0:25:17.360,0:25:22.240
energized i hope so thank you so much

0:25:20.240,0:25:24.159
jerry it’s been a pleasure and listeners

0:25:22.240,0:25:26.080
don’t forget check out the link in the

0:25:24.159,0:25:29.840
show notes and get your free copy of

0:25:26.080,0:25:29.840
jerry’s book alright thank you so much