Earl Young and the Importance of Financial Literacy
In honor of the month, Dr. Cheryl Kirby, associate state director of marketing and professional development for the Florida SBDC Network, recently sat down with Earl Young, executive vice president and senior lending officer of Florida Traditions Bank, to discuss the importance of financial literacy and to glean insight on commercial lending. Young has more than 40 years of commercial lending experience and serves as a member of the Florida SBDC Network's State Advisory Board.
"Financial literacy, as with all education, is critical to the future of our nation if we are to continue as a free capitalist society," said Young. "Sounds serious, but it's not an overstatement. No financial independence—no independence."
As with financial education, the availability of capital is crucial for small business survival and growth. Young details that banks and other lenders want to lend money—they cannot make a profit if they don't make loans. However, bad loans can quickly put any lender out of business.
"Bankers say that you have to have skin in the game before they are going to put their money in your business," he adds. "Your personal credit will play an important part in any lender's decision. If you have a credit problem, when you're able, stop and fix it. Poor planning and lack of financial understanding, along with too fast of growth, can quickly kill a company if not understood and planned for."
Young also discussed the importance of a well-planned, realistic business plan.
"Before the advent of professionally adhering organizations like the FSBDC who can help bring all these things together for a small business owner, as a lender, when I received a business plan I always would automatically cut the projected revenues in half and keep the expenses the same. Entrepreneurs are dreamers—and they need to be—bankers need to be more realistic and meet in the middle somewhere."
According to Young, there has never been a time in his career where there were more, legitimate guaranteed loan programs available to businesses through the U.S. Small Business Administration (SBA) and other sources.
Diane Emery's Leap of Faith
Diane Emery, owner and president of Clearwater-based Executive Reporting Service, is a testament to Florida SBDC Network services and the SBA's loan program. After quitting her job with a financial reporting agency in 1981 after a week of having no work assigned to her, Emery took a leap of faith and started her own business. With assistance from the Florida SBDC at USF's Growth Acceleration service, Emery has added 11 employees and independent contractors, increased revenues to more than $1 million, and has been approved for a SBA loan upwards of $800,000. Read Full Story.
State designated as Florida's principal provider of business assistance, the Florida SBDC Network provides consulting at no cost, training, information, and specialized services to help Florida businesses grow and succeed. With the help of the Network and its professionally certified business consultants, businesses are better-prepared loan applicants, have better business plans, have more qualified loan packages, and have higher business success rates. In 2012, FSBDCN client businesses obtained $235.2 million in capital.
About the FSBDC Network
For over 35 years, the Florida SBDC Network has nourished a statewide partnership between higher education and economic development organizations, dedicated to providing emerging and established business owners with management and technical assistance, enabling overall growth and increased profitability for the businesses and economic prosperity for the state.
In 2012, the Florida SBDCs served approximately 38,000 entrepreneurs and small business owners through consulting and training, resulting in 47,845 jobs created, retained and saved at a significantly low cost of $112 per job; $6.3 billion in sales growth; $235.2 million in capital accessed; $588.4 million in government contract awards; and 744 new businesses started. For every $1 of Florida public and private sector investment in the FSBDC program, $40 was returned to the state in tax revenue.
A statewide service network of over 40 centers with 60 outreach locations, the Florida SBDC Network is funded in part by the U.S. Small Business Administration (SBA), Defense Logistics Agency, State of Florida and other private and public partners, with the University of West Florida serving as the Network's designated lead host institution. The Florida SBDC Network is state designated as Florida's principal provider of business assistance and is nationally accredited by the Association of SBDCs.