Loans from a community lender help women-owned businesses grow

Some entrepreneurs mistakenly believe that taking on debt is bad. When you know how to use it, debt is a financial tool that can help your business grow.

Interesting way, female entrepreneurs have lower credit risk than men, according to a study conducted by ICA and CNote. Yet, compared to their male counterparts, female-owned businesses were more often discouraged from applying for loans, according to the Small Business Credit Survey: Report on Women-Owned Businesses.

Fortunately, not all lenders discourage women-owned businesses from applying for loans. Bario Neal, a designer of ethical personalized jewelryapplied by Pursuit, a Community Development Financial Institution (CDFI) for a SBA 504 loan pre-COVID and has been approved. As a result, they were comfortable applying for an additional loan through Pursuit and for Paycheck Protection Program (PPP) loans.

CDFI, like Pursuit, are on a mission to help neglected local small business owners receive affordable loans. Bario Neal is booming.

The interest of two friends converges around responsible jewelry making

Anna Bario and Paige Neal are friends from Oberlin College who separately found their way into jewelry making. Both were concerned with the origin of materials and responsible sourcing. In 2006, there was no traceability of the social and environmental impacts of the supply of precious metals and stones. “I started researching and speaking with industry connections to determine if there was space to build a business that combines creative design with a social and environmental mission,” Bario said.

In 2007, they attended a conference organized by Ethical Metalsmiths. The non-profit organization is committed to being transparent, responsible and environmentally friendly practices for all facets of the jewelry industry, from mine to market. In time, Bario joined its board of directors and has served there for about seven years. Combining a powerful design aesthetic with ethical sourcing of metals and gemstones, Bario and Neal set out to create a custom jewelry design business that created legacies with social impact.

Economic downturns offer challenges and opportunities

Bario Neal was launched in 2008, just before the financial crisis. “We landed in Philadelphia because we wanted to be in an East Coast city with lots of skilled artisans in an affordable jewelry space,” Bario said. “We also really like the city’s kind of maker culture.” The initial focus of the business was to wholesale products to independent boutiques. Many of these retailers closed during the recession.

The market they studied for two years shifted under their feet. It might seem counterintuitive, but the duo have focused on high jewelry, creating party jewelry, engagement rings, and wedding bands. They have also shifted from wholesale to selling directly to consumers.

Their jewelry is not bought because it is fashionable. “People are still getting married and getting a college degree,” Bario said. “People buy jewelry for these occasions regardless of the economy or they inherit jewelry and want to redesign it. However, they will make that investment differently during economic downturns.”

The couple wanted to make the wedding industry more inclusive. “We wanted to make it clear that our jewelry is for everyone,” Bario said. “We strive to have a product line that includes price. Our salespeople are commission-free and we will give the same consideration to customers looking for a $300 price tag or a $30,000 ring. $.”

Neal returned to college to earn a master’s degree in industrial and product design at the University of Pennsylvania. It included engineering and business perspectives.

Stabilize and accelerate the growth of small businesses through financing

“As a small woman-owned business, we were afraid of getting into debt,” Bario said. However, Bario Neal needed outside funding to buy a building that needed major renovations, so they overcame their fears. Through Pursuit, they applied for an SBA 504 loan, which provides long-term, fixed-rate financing for major capital assets that help businesses grow and create jobs. CDFIs, like Pursuit, often offer SBA loans.

“We had never had any debt before,” Bario said. “They came to meet with us in person several times and helped us through the documentation, making the process very smooth. It felt like a more integrated process than dealing with traditional banks.”

On March 6, 2020, they had their opening night. You know what happened two weeks later. Philadelphia issued a stay-at-home order on March 23, 2020. “We really have the timing,” Bario sighed.

There was uncertainty about whether PPP loans would be canceled, especially for the first wave of loans. Women entrepreneurs, especially women of color, were beware of a vague promise that the loans would be cancelled. Some women who were paying off other forms of debt, such as student loans or credit cards, were reluctant to take on more debt. Bario and Neal thought the loans would be canceled but were confident they could, even if they had to repay the loan.

A large amount of paperwork is involved in applying for PPP loans, and it can be cumbersome for businesses with few or no employees. “If we hadn’t gone through the process of applying for an SBA, we would have been in a much worse position to get funding during COVID,” Bario said.

In 2020, when Bario Neal wanted to open a retail store in New York, the duo went to Pursuit. They applied for and received an LMI Storefront loan at 0% interest. The company received funding at the very beginning of 2021. In addition to investing in physical stores, they have invested in e-commerce.

How did you fund your business?

About Kimberly Alley

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