Mark Cuban thinks I am a moron

By Jonathan Patrick, Senior Vice President/Chief Lending Officer of the UT Federal Credit Union

There is a video flying around the internet where Mark Cuban is quoted as saying that “If you are starting a business and you take out a loan, you are a moron.” Apparently, I am one of those morons. Cuban’s comments revolve around his belief that there is so much uncertainty in a startup, and that the banks don’t care about your business, so getting a loan to get started creates conflict.

Well, Mark, you are right. Most banks don’t care about your business. In fact, most won’t even bother talking to a startup. Which is exactly why UT Federal Credit Union launched the Line12 business micro-loan program. You see, as a credit union, it is in our DNA to impact our community and our members. So, if the only way a member can bring their startup to life and fulfill their dream of owning a business involves a loan, then you can count us in.

Rest assured it’s not about the revenue to our credit union. In fact, we probably have more expense associated with that loan than we do income. And yes, we know that we are “saddling” a startup with debt. That’s why we provide more than just capital in the form of additional resources to help them increase their chance for success. It’s easy to say as a lender, but there is such a thing as “better” debt to have. I’d much rather a member borrow five, ten, or twenty thousand dollars to start a business than on eating out and shopping.

So, is a loan for a startup right for everyone? Absolutely not. In fact, UT Federal Credit Union goes to great lengths to vet out our applicants and only take those who we feel can afford the debt without relying too much on expected business income. We also rely on our committee of outside experts to tell us which startups they feel have the best chances of succeeding. Unfortunately, we have to tell far more applicants “no” than we do “yes.”

Cuban does point out that there are plenty of ways to start businesses inexpensively through hard effort rather than capital. I couldn’t agree more. In fact, I’ve started businesses for a few hundred dollars that have brought me thousands of dollars in return. But there are times when the right idea takes capital to scale. That’s when UT Federal Credit Union is there.

View Jonathan Patrick’s LinkedIn profile at https://www.linkedin.com/in/jonathanmillspatrick.

Jonathan Patrick

Jonathan Patrick

I hope you are in the 43%, not the 70%

By Jonathan Patrick, Senior Vice President/Chief Lending Officer of the UT Federal Credit Union

It’s your baby, your dream. It’s something you have thought about throughout your professional career. I know the feeling myself. The exhilaration that comes with creating and then launching your own venture. I also know how quickly your dream can become a nightmare.

According to a recent study, 43% of Americans polled said they wanted to start their own business. The problem is that only about 1% of those people are willing to put in the work it takes to launch, let alone scale, a new business. There are plenty of reasons this happens. The fun wears off once the creation phase is over and the “real work” begins. Or the hobby-turned-business quickly loses its luster. Maybe you don’t have the right resources at your disposal in the first place.

Of the reported 70% of small businesses that end up failing, I would argue that a large majority do so because they don’t have access to the right resources that can help propel them forward. In particular, they don’t have access to capital and qualified advisors who have “been there, done that.” With those challenges in mind, UT Federal Credit Union set out to develop a business micro fund that not only provides startups access to capital, but also to other professionals that could provide insight into some of the typically challenging topics for a new business. Topics like accounting, business plans and strategy, and intellectual property law.

The Line12 micro fund launched in March of 2014, and I am proud to say that it has already provided capital to numerous startups for aid in expansion. Our participants have benefited in other ways, including introduction to angel investors that lead to additional funding offers. One applicant has even made it onto ABC’s Shark Tank and recorded that session in September. In fact, the Line12 program itself is a startup program that is currently being beta tested by other credit unions around the United States, including Silicon Valley.

At UTFCU we put our money where our mouth is when it comes to entrepreneurship. We have sponsored numerous pitch competitions around Tennessee and have been named the top SBA lending Credit Union in all of Tennessee for three years running. That’s because it’s our dream to help you accomplish your dreams.

For more information on our business lending offerings, visit utfcu.org or line12fund.com.

View Jonathan Patrick’s LinkedIn profile at https://www.linkedin.com/in/jonathanmillspatrick.

Jonathan Patrick

Jonathan Patrick