How often have we heard the expression, “you don’t really know somebody until you walk a mile in his or her shoes”?
I think about that expression this time of year when we celebrate the work of small business owners leading up to National Small Business Week. As manager for Wells Fargo’s Small Business Segment, I have a deep appreciation for the small business customers we serve and the life of a business owner because I, too, have walked in those shoes.
As a former co-owner of an independent marketing and communications agency in San Francisco, I learned that it’s essential to understand credit and know how to use credit to manage and grow your business. Let me share with you my experience using credit as a business owner, and how that shapes my approach to the work I do today.
Most of our agency’s client roster was from the entertainment industry. They were exciting clients to support with high-profile productions, and great theatrical talent. At the same time, like all small businesses, we had our share of challenges, such as managing payables and receivables, and balancing the budget while investing in our growth.
We managed our risk as best we could, and stayed conservative about taking on debt. From the beginning, we grew our business only as big as our billable hours would allow. Yet, to take on significant new business, we needed more staff and more office space.
We had trepidations about our growth plans. Would we have consistent revenue sources to cover more expenses? What happens if we encounter customer payment delays? How do we make payroll? It was clear we needed financing, beyond the business credit cards we held to make everyday expenses.
That’s when we turned to our bank and opened our first business line of credit. I remember the sense of security and relief that credit line gave us. We had the confidence to hire the employees and contractors we needed because we had the financing to consistently make payroll every month, without worrying about the variability of payments – due to a billing issue or even the possible loss of a client.
It’s a business line of credit that also made it possible for our agency to move to a larger office location when our lease expired. On our own, our business did not have the cash to pay for a move. It was a line of credit that made it possible to make a seamless move without business interruption – it gave us the ability to make a down payment, and to pay for the move and construction costs in the new space.
Opening our first line of credit was a turning point. Credit enabled us to make sound investments that proved valuable to the growth of our agency.
Oh…and I guess I should tell you that the line of credit was from Wells Fargo. Little did I know at that time that my next job would be with Wells Fargo, where I would have the opportunity to help small businesses every day.
Today, I get the opportunity to see credit from the other side. I consider myself fortunate to draw upon my ownership experience when thinking about how Wells Fargo can better serve and meet the credit needs of these businesses.
Recently, Wells Fargo launched a business secured line of credit. It’s a product in which we identified a real need among a segment of customers we could serve better. Many of the first customers who are using this product have no credit history or past credit challenges. This product is giving them a chance to obtain the essential credit they need today, and build a positive business credit history.
I’m proud to be part of the team at Wells Fargo that’s doing everything we can to help small business owners become financially ready for credit, apply for credit and use it responsibly. From putting in place training which will improve the skills of bankers serving our business customers, to creating content for our Business Insight Resource Center that educates owners on credit topics, we keep looking for more ways to help small businesses.
What is your story about business credit? My team and I would like to hear how a loan or line of credit helped your business to grow and prosper. Share your story in the comments section!