Lending Options for Female Entrepreneurs
Women now own 40% of companies in America, and that percentage is steadily increasing. However, any female business owner is aware of the inequalities in the industry. Here are some excellent methods for women to obtain the capital required to expand a business.
One of the primary issues of entrepreneurs’ concerns is business lending. Access to money might be difficult for some business owners in particular.
What Business Financing Options Are Available for Women?
The fastest-growing group of small businesses is made up of women, but getting money for their operations might be difficult for them. This may have an effect on every aspect of a small business, from inventory to hiring, and may account for some of the significant differences in revenues and profits between companies with female owners and those with male owners.
Any business owner can apply for a variety of loans, regardless of gender. Of course, grants are the best type of funding because they are free money.
Look at small business grants
1. Federal Grants
Because they are so specialized, US government grants can be challenging to obtain. Each award has a certain annual revenue, industry, and yes, even gender or race associated with it. You can visit Grants.gov or Challenge.gov to learn more about available federal grants. Some of them support women in STEM fields or concentrate their efforts on companies that benefit local children, minorities, or the environment. Even $40,000 is available to companies that deliver goods or services that empower women and families through the SBA InnovateHER competition. Additionally, the Small Business Administration can connect you with a counselor who can assist you in finding additional federal grant programs for your company.
2. State Grants
There are several grants available to choose from and apply for, albeit each state gives a different type. Federal funding is far from the only alternative, and state residency is frequently a requirement. State funding is available for anything from technology to education to public works projects and daycare facilities. To stimulate the expansion of businesses in that state, several of them even provide relocation incentives.
3. Private Grants
Privately offered company grants are simple to seek but difficult to obtain. There is intense competition and rapid turnover, but many major businesses—including banks—offer unusual grants in an effort to support their local communities. Gaining free PR and visibility after receiving a private grant can often lead to more business growth and funding.
If searching for grants is not your thing, there are excellent business lenders and loan products that are focused on equal-opportunity lending.
Available Loans for Women
1. Small Business Administration Loans
There is no specific loan program for women-owned businesses offered by the SBA. However, it does operate a Women’s Business Ownership Office at its Washington, D.C., headquarters. and more than 100 SBA Women’s Business Centers across the nation for assistance with networking, training, mentoring, and certifications. This office offers a wealth of resources for businesses run by women. Women can even stroll into their facility to receive assistance in person. The SBA has a solid track record of assisting women-owned businesses in securing business loans. They found that compared to business loans from regular lenders, SBA loans were more likely to be given to women.
2. Business Term Loans
A term loan is a lump sum payment that is similar to a mortgage, auto loan, or personal loan in that it commonly has a set payback schedule and interest rate. Women business owners typically apply for term loans less frequently than men do, and when they do, they typically withdraw less money. However, if a term loan is the best option for your company, you should submit an application through a reputable equal-opportunity lender.
3. Business Lines of Credit
The quickest and easiest way to fund your business is with a line of credit. Like with a credit card, you will have access to more money than you are really borrowing at any given time since a loan provider will evaluate your company’s performance to determine how much working capital you can use. You just pay interest on the amount you borrow, and some lenders may even provide you with a card that may be used to make purchases. If you don’t know what you’ll need or you know it will alter from month to month, go with an equal opportunity lender and get funded because a line of credit is unbeatably flexible.
4. Investors Funds
You can search groups that link women-owned start-ups with venture capital firms interested in women-owned investments and angel investors who focus on funding women-owned businesses. When looking for these kinds of funding sources for your company, you must do your research and exercise due diligence, but there is a significant effort being made by investors to support the growth of women-owned businesses.
Conclusion
The fact that other organizations have come up to fill the need and even traditional lenders are taking note is reassuring, as women-owned businesses have struggled to get business loans from traditional lenders. Over the past ten years, female entrepreneurs have grown at a rate that is 5 to 7 times faster than male entrepreneurs. Grants, loans, and venture capital investment are all growing as funding choices for female entrepreneurs.
