The Lead Taker: The rise of Other People's Money

The rise of Other People's Money

You may not have heard of Mrs He, and no, she is not a cross-dresser of my acquaintance, but rather the founder of China's largest spicy hotpot restaurant chain with more than 400 restaurants to her name.

She started her business 30 years ago with five tables and is planning a public flotation for 2013, at which point she will almost certainly join the ranks of China’s self-made female billionaires. 

Over 10 per cent of China’s richest business people are women, way ahead of most countries, possibly because of the huge business opportunities that opened up 30 years ago when success depended almost entirely on ambition, hard work and business acumen. 

At that point, there were few enterprise role models for either women or men in China, so everyone made it up from scratch. In particular, Chinese women hadn't been told that it was their fate to underperform in business and to be risk averse, so they simply got on with doing whatever it took to become successful.

Mrs He got on by using Other People's Money (OPM) as have our top female entrepreneurs in the UK (just Google Rita Sharma, Karen Brady, Martha Lane Fox and you will see what I mean).

However, studies here show that women are reluctant to progress their enterprises using OPM, despite the fact that the UK's 'Madonna generation' (that is women between the ages of 50 and 64) have become noticeably more economically active since the credit crisis struck, with self-employment the path favoured by many.

The tendency for this group to shy away from OPM has been noted in high places and the All Party Parliamentary Small Business Group Entrepreneurship Enquiry, which having taken a look at the issues that prevent small businesses from growing successfully, found that both mature women and men in business are reluctant to apply for bank finance. 

Addressing the Enquiry on the subject of female entrepreneurs, Maxine Benson MBE, Co-founder of Everywoman, commented: "Our research has shown that for many women a lack of confidence, access to finance and role models can prevent them from realising their full potential as entrepreneurs.”

During my 30-plus years experience in the UK financial services industry, the reluctance of some business sectors to borrow OPM has always been an issue. 

However, my message to the ‘Madonna Generation’ and older male entrepreneurs for that matter is this: if you have a good idea, a good process or an existing business with undeveloped potential, this is an excellent time to borrow OPM. 

Going against the current trend, I am shouting from the rooftops that there is still money available from institutions, large or small, for the right business, although gone are the days when a manager might stick a finger in the air to judge which way the wind was blowing before deciding whether to lend or not. 

We have reverted to the 1980s model of proper risk-based analysis to decide who should get their hands on OPM and while more effort may be required, the benefits of securing a loan are plentiful. By way of a reminder you can: 

Grow the business 


move to new premises;

take over a competitor;

merge with a competitor.

Defend the business

up skilling;

new plant and machinery;

cashflow funding;


Support employment

directly or indirectly;

reviewing employment contracts.

Increase personal and national wealth

increasing profitability;

instilling a staff bonus culture;

benefiting the supply chain.

Support your family and community

wealth generation;

corporate and social responsibility.

The above list is far from complete, so why not take a leaf out of Mrs He’s book (if not her wardrobe) and remember that any journey starts with the first step because OPM is out there to invest in people with the vision and skills to build a successful business. 

As intermediaries and lenders, you can spread the message and encourage entrepreneurs of either gender to grow using OPM - there's no discrimination in lending, it’s all down to the people involved and the structure of the deal.



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