Help Wanted

"I have only ever heard of one story worse than Rosemary's in my 18 years of lending. She could be the poster child for lender abuse," Hood says, adding that tying all her assets into one loan shut off Gozdowski's access to capital.

He suggested converting the $32,000 to equity and seeking someone with strong credit willing to guarantee any bank loan. Gozdowki's brother, Jack Pasienza, agreed to cosign for a loan, so the pair went to the institution that had made her original SBA loan. But the bank said no, so they went to the institution where Pasienza banked.

Gozdowski viewed this bank optimistically. "They bailed my brother's business out, and he had been in worse shape than me," she says. Bank representatives talked about taking over Gozdowski's current loan and giving her $25,000 to $50,000 of working capital.

But about three weeks after that initial meeting, the bank turned down Gozdowski's loan request. The reason: Unfamiliarity with the industry. The bank also wanted Pasienza to be at least 80 percent involved with her business, which wasn't possible because he had a company of his own.

Totally disgusted with banks, Gozdowski decided to explore the venture capital route. We suggested contacting Capital Across America and Women's Growth Capital, two women's small-business investment corporations, but to no avail. Gozdowski's company was too small for one of the institutions and the other felt conventional financing would be best.

So where does that leave the determined entrepreneur? Struggling, and looking for an angel investor. "We'll just continue being very frugal," says Gozdowski, "barely making it even though we're growing and could do so much more with a little money."

Next month: What you can learn from Rosemary Gozdowski's banking travails.

Contact Sources

Rainmaker Capital Corp., (770) 382-8773, http://www.rainmakercapital.com

Sylvania Ultrasound Institute, (419) 882-7723, sui@solarstop.net

This article was originally published in the September 1999 print edition of Entrepreneur with the headline: Help Wanted.