Lindsey Hively spent Friday afternoon filling out forms.
The 26-year-old wants to take her company, Poptique Gourmet Popcorn, to the next level by launching her comprehensive marketing plan, investing in new equipment and converting one of four part-time employees to full time.
Each of those goals takes money, but Hively can’t get a loan. Never mind that sales have doubled almost every year since she founded the Columbia City company in 2008 with a combination of her savings and some money from her father.
It’s a familiar story to Billie Dragoo, chairwoman of the National Association of Women Business Owners. When women go into business, she said, they usually have to rely on family and friends for funding.
Less than 4 percent of venture capital investment goes to women-owned businesses, she said. “And in this state, it’s nonexistent,” said Dragoo, who is based in Indianapolis.
Data seem to support her assessment. Growth in the number of Indiana women-owned businesses during the past 17 years is less than half the national rate, according to a report released last week by American Express OPEN, the small-business advocacy arm of the multinational financial services corporation.
The numbers have sparked some lively conversations about challenges female entrepreneurs face in Indiana.
Nancy Wright, CEO of Ferguson Advertising, was stunned to learn Indiana ranked 45th in the report for growth in the number of women-owned businesses since 1997.
“That’s pretty damn low,” she said.
Julie Weeks, research adviser on women’s entrepreneurship for American Express OPEN, finds reasons to be optimistic about the report she wrote.
Hoosier women who owned businesses generated more income growth during that same span than the national average, the numbers show.
The report uses U.S. Census data gathered during the business census conducted every five years. Data have been reported for 1997, 2002 and 2007. Weeks used trends and other federal data to estimate numbers for 2014.
Sales for women-owned businesses increased nationally by 72 percent, based on her estimates. But sales grew by more than 80 percent in Indiana. Keep in mind that Hoosier sales growth outpaced the national rate even though the number of businesses nationally grew at twice the rate of Indiana’s.
“The existing businesses are becoming very economically robust,” Weeks said Friday. “But there isn’t as much new-business creation.”
Nationally, the number of women-owned businesses increased by 68 percent from 1997 to 2014. In Indiana, that number grew by less than 33 percent.
That compares with a 42 percent increase in Michigan and a 31 percent hike in Ohio during the same period.
The general economic conditions in each state affected the growth of all business, including companies owned by women, Weeks said. So states hit hardest by the recession saw slower growth in all businesses.
Wright struggled to think of why women doing business in Indiana might face more obstacles than women running companies in other states.
“I couldn’t point to one thing,” she said.
Many challenges affect all women, regardless of where they live, Wright said. If you embrace the theory that women are less inclined to take entrepreneurial risks than men are, for example, there’s no reason to believe that Hoosier women would be any more risk-averse than women living in other states.
Wright took the leap into ownership in 2002 when she bought a controlling interest in Ferguson Advertising after helping build the local agency for 25 years.
“I was a logical succession to ownership,” she said.
If more women were in higher management positions, they might have more opportunities to buy ownership stakes in their employers, she said.
Wright didn’t set out to own the agency with business partner John Ferguson. Ownership, she said, is a big step. “It’s a huge responsibility” for anyone, male or female, she said. At this point, the firm employs 23. That’s 23 families who depend on the advertising agency’s success.
“That’s the stuff you lose sleep over,” she said.
Like the statewide trend, however, this majority woman-owned business has flourished, growing revenue every year, even during the downturn. In 2013, a banner year for Ferguson, sales increased by about 15 percent, Wright said.
Not every woman can work her way up within a company the way Wright did.
Weeks, the researcher, questioned whether organizations that support business startups in Indiana are being as inclusive as they could be.
“Perhaps they’re not reaching women as well as they could,” she said.
Lending a hand
Various state and local organizations and programs make helping women a priority.
Dragoo, of the National Association of Women Business Owners, praised Indiana for offering numerous opportunities for female entrepreneurs to get advice and critical introductions to lawyers, accountants, investors and bankers.
“You in Fort Wayne are doing a lot of great things for women and minority businesses,” she said.
In her official capacity, Dragoo also meets with Indiana bankers, who talk about how federal regulations severely restrict their ability to lend to all startups and emerging businesses.
As a result, she said, entrepreneurs are looking to other ways of raising money, including seeking investors online and among friends and family. The Small Business Administration has started encouraging women to seek loans from community banks and credit unions, she said.
Access to capital is a long-term problem for businesswomen, Dragoo said.
“And nothing has changed,” she said. “We’re getting tired of talking about it.”
It’s been only 25 years since federal law made it illegal for lenders to require women to have a male relative co-sign for business loans. But there’s reason for hope.
Initiatives are in the works at the national level to help women business owners, said Dragoo, who actively promotes opportunities for women. Details will be announced soon.
All small-business owners struggle to borrow, she said.
“Banks do not loan money (for startups). They’re too regulated,” Dragoo said.
Individual loan applicants’ experiences don’t reveal the broader banking picture, JPMorgan Chase spokeswoman Christine Holevas said Friday.
True, Chase doesn’t lend to every entrepreneur who completes an application. A business has to have sound fundamentals, including a business plan, staff expertise and opportunity for growth, she said.
Holevas didn’t cite regulation as a stumbling block in approving loans.
“Chase serves more than 4 million American small businesses, has lent to small businesses through the recession, and continues to lend to help these businesses grow and succeed,” she said in a statement.
Chase has been first in lending through the U.S. Small Business Administration for four consecutive years, Holevas said.
Bank on it
Nevertheless, access to capital continues to be an issue for some small-business owners.
Barbara Johnson, former senior program manager for the Fort Wayne Women’s Bureau, counsels local entrepreneurs.
The Fort Wayne woman is also a business owner. Johnson is director of SheeKriStyle Academy of Dance Arts, which teaches all types of dance to students of all ages.
Johnson used retirement savings to invest in her studio instead of allowing the bank to use her home as collateral for a business loan.
“Lending processes vary from state to state,” she said. “Indiana is a lot more conservative” than some other states.
Hively’s hopes for a $10,000 loan to expand Poptique were dashed recently when she met with her banker, who made it clear she’ll have to look elsewhere.
So the Columbia City woman is exploring various programs offered by the Whitley County Economic Development Corp. She is also considering crowdsourcing, a method of fundraising by going online to ask a lot of people to invest a little money each. Indiegogo is one option. Kickstarter, the site that helped producers solicit funding for the new Veronica Mars movie, is another.
Although other entrepreneurs have raised money based on only donors’ desire to support an interesting, worthwhile or quirky project, Hively is looking at ways she could give back something for their investment.
She might issue vouchers toward the purchase of popcorn from her website.
Hively, who was an Indiana University freshman when she launched her company, doesn’t expect to get something for nothing.
NOTE: Because of a reporter’s error, Barbara Johnson was misidentified in a story about women business owners on Page 1A in Sunday’s print edition. Johnson no longer works for the Women’s Bureau.