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How to resolve AdBlock issue? The Afterglow shone through ‘lender bias’ against beauty businesses
By Leon Gettler, Talking Business >>
FEMALE entrepreneurs have a problem these days. They can’t get funding from lenders. They’re regarded as ‘high risk’.
This is particularly true in the beauty industry.
Jessica Leonard and Ashleigh Potocki, who own the Sydney-based self-titled automated ‘glow’ studio called The Afterglow, say the big problem now is getting funds.
“If we’re talking from a sector perspective, women-owned businesses tend to be in the retail hospitality and beauty spaces,” Ms Leonard told Talking Business. “They tend to be more impacted by things like the cost of living, and the like, pandemics etcetera so we do tend to be running businesses in higher risk spaces.” 
Tough getting funded by banks
Ms Potocki said one of the biggest challenges for businesses owned by women was getting funding from banks and lenders.
“Some of the lenders don’t understand the space we’re in particularly in the beauty industry with equipment we may need,” Ms Potocki told Talking Business.
“I’ve often had to explain what the equipment is to certain lenders and they automatically deem it as a high risk purely because they don’t understand it.
“When we’re talking about laser equipment – and I’m talking to a gentleman on the other end of the phone who doesn’t understand the space – I have to therefore explain the equipment, and what it does and they automatically deem it a high risk.
“Or, in instances when payments aren’t made, they’re going to have to think about how they will re-sell that piece of equipment and things like that and they dump that into a category of high risk and potentially not lending that money to us.”
While there are other industries that use laser equipment, the beauty industry is notoriously difficult.
“Any lender will tell you that,” Ms Potocki said.
So how did they get the money?
Finding a way can be challenging
“We actually did require assistance by our husbands, who have no beauty industry experience whatsoever, in order to be able to meet the funding criteria for our businesses,” Ms Potocki said.
“Whilst I am the CEO, my husband is the director because people take him more seriously. 
“I myself did all the talking to lenders but my husband was the one who was required to meet the criteria.”
“I’ve had a skin clinic for the past 20 years and every time I need funding, I’m met with these same questions.”
Ms Leonard said The AfterGlow was a new concept insofar that it is unmanned, automated and totally self-service orientated.
So it’s a very new concept.
“When speaking to lenders, when we wanted to get this off the ground, not only did we face that challenge that this is a new concept but it’s also that pre-conceived idea that the beauty industry is notoriously difficult to fund,” Ms Leonard said.
Ms Leonard and Ms Potocki said there “were only six lenders out there” that were willing to fund beauty industry businesses run by women.
Without labour costs, as it’s automated and self-served, the running costs would be low.
But the capital costs of equipment and the high-quality fitout are high.
“To make a space accessible without a person being there, that is expensive,” Ms Potocki said.
Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness
https://shows.acast.com/talkingbusiness/episodes/talking-business-3-interview-with-jessica-leonard-and-ashlei
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