I never knew I wanted to be an entrepreneur, until I became one. So when I started my company in the kid’s food business, I knew I would face numerous obstacles. What I hadn’t expected was a broken fridge, produce that had spoiled in transit, license fees that nobody had told me about, and kitchen costs that were 125 percent over budget. No one ever warns you that despite your best planning, you will at some point face a cash flow issue, and during those times you will probably feel alone and a little strapped for options.
It is at these moments when your mailbox, email, and every ad on the internet seems to be filled with options for capital at low rates. I remember going out to get the mail to find twelve offer letters for cash loans with APRs as low as four percent. Given I had almost maxed out my credit card to start my business, that four percent seemed like a pretty good deal. And as a female who is a person of color, I felt that many of these offers were specifically targeted at me, something I would later find out was true. Women entrepreneurs start companies with 50 percent less capital than male entrepreneurs, and minority business owners are denied loans at nearly three times the rate of non-minority owners.
This has led to an influx of unregulated online lenders who promise this “quick-and-easy” cash at those four percent rates. With all the things you have do as a small business owner, reading through the fine print of offer letters is not a high priority, and lenders know and take advantage of this by not disclosing upfront the real rates and prepayment penalties that can quickly drive a small business out of business.
It’s why we are launching Venturize today, at the Small Business Finance Forum, surrounded by mission-driven lenders who also want to make sure that entrepreneurs get the chance to make the right borrowing decisions for their business so they can grow and succeed.
Venturize is an online platform designed to equip small business owners, especially those of color, women, and under 40, with powerful tools they can use to make important decisions about accessing responsible capital. It doesn’t sell anything, it just gives small business owners the information about loans in a clear, trust-worthy fashion that is easy to understand.
Venturize won’t solve the broken fridge or inventory issues, but it will help small business owners save some much needed time when looking for a loan.
To help us reach more small business owners, and help them borrow confidently, join in on the conversation using #BorrowConfidently on Twitter. Share what you think small business owners should know about the lending process, offer your advice and insights, and follow us on Twitter @Venturizeorg.