BOWLING GREEN, KY. — As a Northern woman moving to a Southern town, Robin Hunt faced enough adversity upon opening her injection molding company six years ago.
She was quizzed with tough questions from potential customers and vendors. What are your machines' cycle times with certain materials? What tool steel is best? What grade of material should be used?
"Coming from out of state, I was seen as a damn Yankee, the new kid on the block," said Hunt, who moved from the Detroit area to start H&W Plastics Inc. in Bowling Green. "Asking the questions was a Southern thing. But they began to accept me as a woman owner of a plastics company."
But after getting ingrained in community life, Hunt faced another, more-daunting challenge when she decided to expand her business in 1998. Getting a loan from her bank — the same one that initially had financed her company — suddenly was difficult.
Hunt turned to Nashville, Tenn.-based Capital Across America Inc., a private funding group that targets woman-owned businesses. Hunt became the first client of the new mezzanine-financing company, founded by business owner and investor Whitney Johns.
The company did more for Hunt than merely write a check; Hunt said the loan was for more than $500,000. Capital Across America also helped her create a business plan and even recommended setting up a board of directors to serve as consultants to her firm's growth.
Those long-term, deeper-seated relationships are what sets capital funding firms apart from banks, said Christopher Brown, president of Capital Across America.
"Woman owners are not by nature huge risk-takers," Brown said. "It's more important that they have a relationship with you, that they trust you. They're not as willing to just do a deal per se."
Differing financing options are starting to mushroom for woman-owned manufacturing companies. Several other venture- and mezzanine-financing groups now target women, some focusing on service industries or high-tech businesses.
Another nonprofit group, New York-based Count Me In for Economic Independence, has started a multimedia plea for funds to finance woman-owned companies. The group has launched a Web site (www.count-me-in.org), held a splashy news briefing in March, gave an interview on public radio and gained free advertising on America Online and several woman-based Internet portals.
The company hopes to raise $25 million in capital funding through donations of $5 and higher, said Kathy Keeley, opportunity innovator for Count Me In. A goal is then to provide loans of less than $10,000 for woman-owned businesses.
The company was started by Nell Merlino, founder of Take Our Daughters to Work Day, and Iris Burnette, a former State Department communications officer. Sponsors include the BP Amoco Foundation and American Express.
The difficulties for women in gaining bank loans spurred the program, Keeley said.
"In manufacturing, you need a significant amount of capital to start up," Keeley said. "And women have difficulty accessing capital. That's why a lot of women have gone into food or clothing manufacturing; there aren't those barriers to entry."
Money can be difficult without extensive prior work experience, Keeley said. And many women have collateral and assets tied up with male spouses. While that benefits the marriage, it might weaken the woman's credit record, she said.
Plus, women have a lower comfort level with borrowing large amounts of money. About 70 percent of businesses that women start are financed with credit cards, Keeley said.
That access-to-cash problem is the single greatest concern for women, Brown said. Most banks give a client 15 minutes to present a business case. Long-term relationships or help in building a business are not part of a bank's arsenal, he said.
"We'd rather invest the time and energy necessary to understand and nurture before doing a deal," Brown said. "Banks want to see your three-year projections and decide on a transaction. It can be a very threatening, impersonal environment. A number of women don't take well to rejection."
Capital Across America provides mezzanine loans — or smaller loans for expansion — in the range of $250,000-$1.3 million, Brown said. Any amount greater than that is referred to a larger venture capital group. To date, the company has made 14 loans and one equity investment, Brown said.
Hunt turned to Capital Across America when her bank changed ownership just as she prepared to expand. Her goal was to replace many of the company's 22 presses, add a quality laboratory and expand space. But new bank management would not return telephone calls or respond to written requests for meetings, Hunt said.
Instead, she chose a "relationship manager" at Capital Across America to help with her request. "We needed help to think outside the box," Hunt said. "Our board of directors was a great answer to help us run a business."
H&W has recorded nearly 100 percent growth annually, she said, with sales now of about $4 million.
The right financial person is key for success in a woman-owned plastics company, said Annette Crandall, owner of Quality Assured Plastics Inc. in Lawrence, Mich.
Crandall took over the injection molding company in November when her father, James, retired. She said that without a supportive bank behind her, the company could have faced a rockier road. The company recorded about $3.5 million in sales last year.
"We're ready to work new markets," Crandall said. "But I'm not sure how a woman business owner would have the resources to take advantage of that without a lot of money behind you or a good banker to work with. It's so capital-intensive.
"Fortunately, our bank has done one outstanding job. We've proved ourselves to them, and that's raised their comfort level with us."