Character – The Indispensable Element within All of Business Financing
By Woody Wollesen

In furtherance/support of his highlighted special presentations on business financing at the upcoming 2015 National Veteran Small Business Engagement, November 18, 2015, 11:00AM Session, Pittsburgh, PA

It’s rather curious why most business capital discussions routinely ignore the fundamental element of “character”. From most every perspective it’s an indispensable element. If mentioned at all, the focus tends always to gravitate in only one direction – the applicant (entrepreneur/business owner). The then singular inquiry is whether there might be satisfactory qualifying credit criteria or investment worthiness?

In point of fact all financing transactions involve a “duality” – two sides or perspectives that should always be considered and evaluated. It is a road that goes both ways.

First the applicant (entrepreneur/business owner side):
Regardless of financing type (debt, equity, and/or combinations of both) “character” will always be an essential element. In every case, one must convincingly prove “character” of the enterprise and/or its owner/management. In order to access adequate capital or financing when/where needed, the enterprise (as well the owner/management) will invariably have to undergo varying degrees of due diligence scrutiny by the funding source respecting every facet of its operations (especially for bank lending), performance reliability, market prospects, and likelihood for profitability/necessary returns..

The operative term that needs to be clearly understood – “trust”. Ask yourself some rather straight forward questions:

* Why should any financial source grant funding unless there exist concrete proofs that the company can in fact reliably perform, be profitable, repay (if debt) and/or create expected investments returns (equity)?
In “real world” financing, certain precepts rule:

* He who has the gold maketh the rules. Either prove character, generate trust and a  “comfort zone” or the money will not leave the vault. Perceived risks rule the world of money.

    It’s a rather simple precept – given the opportunity, you either dazzle’em or die slowly danglin’ in the wind!

A core component to show and prove character must always revolve around having the requisite knowledge regarding best business practices and financial acumen – the two primary knowledge deficiencies that are the real drivers for continuing business failures and lack of capital access for small business throughout the country. See, (Current studies and data directly confirming drivers of business failures with recommended guidelines/remedies to correct)

Without both knowledge facets in place the enterprise chances for success
diminish exponentially over time see, (Real World Facts – only about half of all new establishments survive five years or more – only one-third survive 10 years or more. (US SBA Off. Of Advocacy; see also,;

    When it comes to operating an enterprise and mastering its financial requirements, the     appearance of a successful business is no more valid than standing in a garage makes you a car.

Overlooked from most every business financing discussion regarding “character” is serious scrutiny regarding the “funding source side of the equation”. It never ceases to amaze how many entrepreneurs/business owners literally leap for any conveniently perceived low cost funding option without the slightest scrutiny for “character”. Be warned – costs are but one element for consideration if genuine success is desired.

Invariably such short sighted thinking will become a lingering trap often waiting to eventually open up and devour. Mistakes and failures to properly investigate and evaluate options and consequences routinely result in serious later detours with unnecessary expenditures of resources/money to correct. When unable such becomes a preventable failure is often the ultimate outcome.

Borrowing from an old Fram Oil Filter Commercial “You can pay me now or pay
me later, but real costs will always get collected” . The real question that should be posited in every instance: Whether real “character” exists with the financing source? Is the financing option at issue really a “best fit” to achieve enterprise goals and profitability?

For every entrepreneur/ business owner just a few examples of necessary questions that should be routinely posited in every financial pursuit:

* Assuming a reasonable cost, is this financing type really the “best overall option fit” for the enterprise? A mismatch in timing, type, and applications can have disastrous consequences.

   “Many business owners don’t have to turn out the lights to be in the dark”.

* What is the real cost in this transaction and more importantly? How do the terms and conditions either help or hinder proper meshing for enterprise profitability goals? One of the greatest shortcomings within business financing will always be transparency by the funding source – worse the business owner usually lacks the requisite knowledge to even ask the right questions.

* Who and what is actually ruling this funding transaction? Marketing representative or agent/conduit claims in the deal process are not reliable or trustworthy as contrasted with written terms/direct commitments offered/received from the real decision maker(s). Time is money. For most entrepreneurs/ business owners the money was need “yesterday”. Needless delays in getting either a yea or nay can not only be critical but crippling where performance deadlines loom.

   “It is an immutable law in business that words are words, explanations are explanations,  promises are promises but only performance is reality”.  Harold Geneen

* Every new contract or business development expansion usually requires instant capital infusions or intra investments to perform with consequent invoice and further delayed payment cycles for revenues receipt – the always proverbial cash flow mismatches. So how and where does one fund for those situations and still maintain all required margins and profitability?

About the time we can make the ends meet, somebody moves the ends”. Herbert Hoover

* What about reliability of the funding source? What happens when the “real world” intervenes with a few deep “pot holes” or “twisting turns” such as serious interruptions in cash flow, slow or extended pay receivables (especially in government contracting), or other adverse events/circumstances (internal or external)? Words are one thing. In downside situations, a cooperative and accommodating capital source is a must for enterprise health and longevity – in one sense, far more valuable than the cost of funding itself.

An ounce of performance is worth pounds of promises.” Mae West

According to a U.S. Bank study, 82 percent of small businesses fail due to poor cash management and access to working capital. . In simple terms, regardless of the accounting in the “real world” “cash is always king”.

Bottom line: Character is part and parcel for business and financial success. It applies to both sides of the funding process, applicant and capital source. By definition, “character” is a prime and critical element within having the required best business practices knowledge and financial acumen.

There is only one “real world” educational resource in the country (a 501 (C) (3) non profit Internet platform) specifically structured and targeting those two necessary knowledge ingredients and comprehensively, covering in detail every key business financial option.

“Ultimate Financing Guide” is the only published treatise dealing with “down in the trenches” and “hands-on” experiences involving literally thousands of small business transactions and every key type of financing options. That “real world” educational resource is not available from any other source (governmental, private, or academic environs). The Ultimate Financing Guide is readily available and instantly downloadable at Through and via Operation Veteran Empowerment all educational arrays are FREE for all military veterans and their families. / (There is a token $5 contribution (100% deductible) dedicated entirely toward site maintenance and to ensure that in fact “Veterans are Helping Veterans” through this non profit project.)

(Profile: Woodrow D. Wollesen, recognized national small business financing expert, former co-partner national law firm, seasoned serial entrepreneur/business executive, financial/business operations consultant, author, founder/creator of American Empowerment DBA Operation Veteran Empowerment, a non profit 501 (C)(3) educational resource platform, former graduate school of business professor, military veteran; 2006 US SBA Small Business Financing Champion, (8 years) Board Member, Executive Officer, Instructor with the prestigious National Women’s Business Center, Washington, DC; NWBC 2005 Man of the Year – see also more extensive background profile at; LinkedIn