Small Change

A Loan At Last

The struggle behind one entrepreneur's executive housing loan.

The company: Corporate Suites at Lakeside LLC
Owner: Vickie Snavely
Founded: 1998
Loan specs: $550,000 from Bank of Floyd (in Floyd, Virginia); $399,000 from the SBA

Are business loans hard to come by? It depends on whom you ask. Vickie Snavely, for one, describes her recent loan search as "a nightmare." That's not what you'd expect from an entrepreneur who's run three successful businesses (a household amenities rental company, a window treatments business and a property management firm) for more than a decade.

But sometimes when you're new to the lending game, things don't turn out the way you expect them to. Snavely had never previously required loans of this magnitude to support her businesses. Then she decided to launch a fourth venture, a Salem, Virginia-based extended-stay facility (for travelers who need lodging for a longer period of time than the typical hotel stay but not long enough to warrant leasing an apartment). Since the project involved real estate and construction, she knew she couldn't move forward without an advance of nearly $1 million.

Snavely had a plan: She was sure if she sought financing from eight banks and 12 nonbank lenders, one would work out. Unfortunately, her strategy didn't account for discrimination or sexual harassment-obstacles she encountered that threatened her chances of getting a loan. She says one bank representative actually said he wouldn't work with a woman; another lost his job after he made a series of inappropriate comments to Snavely. During her two-year search, it seemed everyone she turned to considered her requests unreasonable. "This process has reaffirmed my opinion that it's still a man's world out there," she says.

In late 1997, Snavely looked to her local Small Business Development Center (SBDC) for help, and things finally started looking up. After landing partial financing from the SBA through Virginia Asset Financing Corp., Bank of Floyd in Floyd, Virginia, decided to provide the balance of her loan request. As for the final 15 percent of the necessary capital, Snavely was able to refinance some property to squeeze out the additional funds.

While Snavely is happy with the loan package, it still bothers her that she encountered so many serious obstacles in her search for funding. She's convinced, however, that persistence pays off; without it, she wouldn't have been able to move forward on this latest venture.

To entrepreneurs traversing the same path, Snavely recommends seeking help from local SBDCs as a first step, not as a last resort. She credits her eventual success to a rock-solid business plan, more than a decade of industry experience, an extensive customer base that provided letters of intent, and a reliable accountant.

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This article was originally published in the September 1998 print edition of Entrepreneur with the headline: Small Change.

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