Note that this blog post comes just after hearing the news about our attempts to secure a mortgage for the last couple of weeks so it may be a bit pointed in nature. :)
We just spent the last week and a half to two weeks in limbo not knowing whether we had a home or not to go to at the end of September. We had sold our home in anticipation of purchasing one just outside of the city.
We accepted a bid from the buyer of our current home and the seller of the place we were looking at accepted ours.
Of course we had "Subject to Financing" in our bid contract. But, needless to say we, that is Monique and I, did not count on the amount of pain securing the mortgage for the place we bid on was going to cause us.
So, we had a possession date for our home at the end of September with no ETA on financing for the place we were bidding on. If the financing did indeed fall through then we were in a _really_ bad place needing to be out of our own home with no destination set.
Banks, Lenders, and SMB Owners
It is a fact of life for the small business owner that the banks do not like us. We are too high a risk for lending.
The statistics of the number of failed businesses in the first three years relative to the number of successful ones make the balance scale look like a 1 tonne brick on the _fail_ side while the successful side has a few feathers.
That balance scale does not change much for the survivors of the first three years either. The number that make it to the six or seven year mark are but a sliver of those that made it past three.
So, here we are after ten years for MPECS being incorporated and my being self-employed and we _still_ hit the credit roadblock with the banks and some lenders.
The primary difference as we see it between us and someone that makes a salary or wage is that they have a steady paycheque every two weeks while ours fluctuates with the amount of work being done.
As we all know, cash flow is king in a small business. We see that as one of the main reasons for an SMB to _not_ put services into the Cloud.
Yes, the cash needed for an SMB IT Solution will be up-front. But, once that solution is in place the ongoing maintenance plan can be put on hold (depending on the MSP) if the economy slows down.
One cannot put the Cloud Service Provider on hold for payments.
It means that despite owning an incorporated company we SMB owners need to sign away our first and second born along with the contracts in our blood before we can get any reasonable amount of credit to work with (pun obviously).
Lenders prefer to secure credit against us personally, not our incorporated entities in our area of the world. The same may be true in other areas of the world. Say no to Personal Credit Reports and the lenders say no to any credit.
Indeed, just recently after having to sign away our firstborn for our first company credit card five or six years ago we had to go through the entire jump-through-the-hoop process to get a credit increase on that card even after five or six years of activity with balances paid off every statement cycle.
A perceived SMB cash crunch situation is one reason we get a plethora of "Canadian Small Business Grants" e-mails and phone calls from folks looking to take advantage of us in some way due to SMBs being more than likely cash hungry.
Securing A Mortgage
Now, besides getting married for life one of the biggest decisions one makes is to secure a mortgage on a place to live.
We had run the gamut of trying to secure a lender for the purchase of our first house (about 2-3 years after MPECS was born) with the end result being nada, zilch, zippo.
We were fortunate that our Realtor knew a mortgage broker, Phil LaRue, that pulled one out of the hat for us by securing a hand-shake mortgage with GMAC at a premium over the bank's rates back then.
He then did it again for us when we purchased our current home. But, not without a number of hoops to jump through yet again.
This time around we had to jump through _a lot_ of hoops before lenders would take us seriously. Yet, even after all of this time no banks would even consider looking at us.
So, here we are a week and a half later after signing the paperwork to get the ball rolling on the purchase and we have finally heard back from the mortgage insurer (CMHC was the final roadblock) that they will insure our mortgage.
Our Subject To Financing conditions are almost removed.
Can you imagine how stressful that last couple of weeks have been?!?
SMB "Experts" Know?
This constant fight with financing our lives for the last ten years is something that someone, or some SMB "Expert"organization, that has never owned a small business may never get.
Folks that receive a paycheque do not need to worry about whether they can get credit or not (barring bad exceptions to the rule of course ;) ).
One cannot know the taste, texture, and all-around goodness of an Anchovy Pizza unless one has actually eaten one. Period.
One cannot know what it is like to lose one's child (previous blog post) unless one has actually gone through that experience.
Someone that has spent their life studying a particular subject, even secured a PhD in it, may know a lot _about_ the subject but may have very little clue how it _feels_ until they actually _live_ through it.
We are not knocking those folks and their ability to help us out here. We have had some amazing professionals help us out throughout our lives. That's not the point of these paragraphs.
Our point is this: There are some experiences in life that one can know a lot about in so many ways but may have no clue about _living_ it and _experiencing_ it.
That's why "Experts' is in quotes here with regards to owning and running an SMB business or multiple businesses.
One cannot know the real risks involved owning and running a small business until one's family is hanging on the brink of being homeless. Or that next business need is sitting on the shelf due to not having credit available.
There are too many examples to list here but we believe that you, our readers, get our point. :)
Our Small Business
The all-around experience of owning and running a small business is much more rewarding as we are working on _our_ dreams and not someone else's dreams.
We would be very hard-pressed to find a small business owner that is not passionate about the products and services that they provide.
And therein lies one of the _most critical_ of elements of providing IT products and services to other small business owners that we have mentioned in this blog before.
A small business owner providing products and services to another small business owner _understands_ what it takes to purchase those products and services.
We understand the need to trust others to provide us with the best possible information and direction when it comes to aspects of our business we may have no clue about.
Thus, there is a connection between us that is not there for a large organization's sales people and technical support folks that try and provide products and services to small businesses.
This face-to-face connection is one of the main reasons that the Expert IT Solution Provider has done so well over the last ten to fifteen years.
We share the passion and can provide an excellent IT experience for our small business clients.
Microsoft Small Business Specialists
Co-Author: SBS 2008 Blueprint Book