People interested in starting a small business or trying to grow an existing one were introduced to lenders who can provide funding during a half-day seminar at the Donald W. Reynolds Center on Wednesday morning hosted by a Little Rock-based community and economic development agency.

People interested in starting a small business or trying to grow an existing one were introduced to lenders who can provide funding during a half-day seminar at the Donald W. Reynolds Center on Wednesday morning hosted by a Little Rock-based community and economic development agency.

Houseaboutit works with small businesses in rural Arkansas and the Mississippi River Delta region of the state and the communities they are located in to increase economic activity, according to agency executive director Susan Forte.

“The main thing we are doing today is offering resources on how to grow your small business,” Forte said. “People who want to grow their business often don’t know how to start and we are trying to help them with that today. We brought all levels of lenders together here to allow participants to see how it is done.”

Representatives of several Arkansas micro-lenders, which are financial institutions that specialize in making relatively small loans to people who may not qualify for loans from traditional banks, explained the steps that must be taken to secure a small business loan.

Wonder Lowe, a program officer with Hope Credit Union, said that her organization had its start in 1995 as a small church program in Jackson, Miss.

“We will try to help people who the big banks won’t look at,” Lowe said. “We try to help people clear up what it is that they want to do. We help people develop what they want to do and then talk about the credit that they will need. We offer start-up loans of between $500 and $1 million. We can partner with other banks if someone needs more than $1 million. We are not the typical small business lender.”

Lowe explained that in Arkansas her organization focuses its efforts from central Arkansas to the southern border of the state and east along the Mississippi River delta up to Blytheville.

“As an organization that had its start in a church we do not lend to businesses that sell alcohol or tobacco,” Lowe said.

Lowe emphasized the importance of having a good business plan.

“Be realistic about how much money you need,” Lowe said. “One of the biggest causes of failure in small businesses is a failure to adequately capitalize on the front end. There is a cost for everything in doing business. Keep good records and keep your business books separate from your personal books.

“A lender wants to know how you are going to maintain your business, how you are going to make money and how you are going to pay them back,” Lowe said.

Russell Hampton with ACCION Arkansas explained the services provided by his organization.

“We are Arkansas’ largest micro-lender,” Hampton said. “We provide business start-up loans of between $500 and $50,000 and can offer up to $250,000 for existing businesses with at least two years of financials to show. Credit is an issue that stops a lot of us from doing what we want to do. The biggest thing you can do to improve your credit score is pay your bills on time. People always laugh when I say that but if you pay your bills on time for a year you will raise your credit score. We have to get out of our own way and do things the right way.”

Hampton said that ACCION takes the time to get to know small business owners personally as part of its decision-making process on potential loans.

“I am able to work with small business owners to get to know them and to find out what is going on,” Hampton said. “I am able to go in and see what the computer can’t tell.”

A mayor’s perspective

Mayor Larry Coulter of Montrose, Ark., said his small town has partnered with several other small towns adjacent to it to increase economic activity in far Southeast Arkansas.

“The Montrose Regional Commerce Project includes Montrose, Parkdale, Wilmot and Portland,” Coulter said. “It is really a modified business incubator. We constructed a building in Montrose that classes are held in on assisting small businesses. We have helped people with new ideas. We have helped eight businesses get started. The main thing is to get them support and to find financing. ACCION helped us out.”

David Rainey

Superintendent David Rainey of the Dumas School District offered lessons he has learned as an entrepreneur.

“Everybody knows I am a career educator and have always been in education,” Rainey said. “But this set the stage for an entrepreneurial issue. Simply put, we did not have enough money. In the education field we don’t boast about making a lot of money. My wife and I have four sons between us, two that I brought to the marriage and two that she brought. They are close enough in age that we realized we would have three children in college at the same time. We knew that we needed another income.”

Rainey said that in order to grow a small business, people make the difference.

“How many smart people are in the room?” Rainey asked.

“Would you hire you?” Rainey asked. “If you are opening a small business that is what you are doing. You must have the right people in your business. Are you the right person?

“Bill Clinton was famous for saying a lot of things and one of the things he said was there are 24 hours in a day,” Rainey said. “That’s not news is it? Well, most of us think there are eight hours in a day. We plan our day and set our clocks by it. If you want to grow your business you will need to expand your definition of a day. You must have the right work ethic.”

Rainey said when he was a young man he tried unsuccessfully to secure a loan from a bank in Dumas.

“I was not successful because I did not have a business plan,” Rainey said. “Your plan is your guide as a business owner. There should be an intentional effort to expand your business. Your profit plan for your business should be a moving target. If you’re not growing you’re basically getting ready to close your doors.”

Rainey said the banker who had denied his loan owned property adjacent to his and expressed an interest in buying it.

“I told him no but then I began to think that he would probably want to buy my neighbor’s land if I sold him mine,” Rainey said. “Then I realized that the reason why he was the person who had the money was because of his aggressive attitude.”

Rainey said that his first business was a television and appliance rental store.

“I ran it with my partner for five years,” Rainey said. “We had a plan to expand. We advertised and put our profits back into the business. We bought a backhoe, truck and trailer after year two for grave openings and closings. That purchase doubled our income.”

Rainey said he currently owns several rental properties in Dumas.