#small business loans for women
Alternatives to Small Business Loans for Women
According to a recent study from the Small Business Administration, small business loans for women are harder to come by than those for male business owners even when controlling for factors like industry and credit score.
Many female business owners are well aware of the challenges of obtaining loans and choose to rely less on outside capital than do men. Because of the difficulties of obtaining business loans for women, female operated businesses often have less working capital and tighter budgets. Women are also more likely to utilize non-traditional forms of lending such as peer-to-peer financing or alternative business loan providers such as Kabbage .
According to the SBA, the “level of startup capital is a strong predictor of business success.” Having access to capital is essential for women to have the same opportunities as men to achieve success.
When looking at the statistics on women-owned businesses published by the Association of Women’s Business Centers. it’s clear that small business loans for women are essential to helping fuel the overall economy.
- Women owned businesses account for more than 40% of all privately held firms
- One in five firms with revenue of $1 million or more is woman-owned
- 10.1 million firms are owned by women, employing more than 13 million people and generating more than $2 trillion in sales each year.
While small business loans for women may be limited, there are plenty of other ways to obtain working capital. If you’re a woman who is launching a new business or who needs funds to grow an existing business, the following strategies can help:
- Find Out Your Options
There are plenty of alternatives to traditional bank loans. It can often make financial sense to consider lines of credit, SBA microloans. and credit cards depending on your particular situation. Cash advances can often be a good choice if you need a quick source of funds to purchase inventory or to hire help during a busy season.
Even with a good personal credit score, it can be hard to obtain business loans for women. Establishing credit for your business is always a good idea even if you choose not to work with banks. Your good business credit can be beneficial for obtaining desirable terms with vendors and for getting lower interest rates on business credit cards .
Your business plan shouldn’t be just pre-launch homework that you tuck into a desk drawer. It should be your blueprint for the growth of your business. By keeping current with your financial projections, marketing, and development efforts, you will always have the backup to show potential lenders what you’re doing now and where you’re headed in the future.
Many small business owners make the mistake of not depositing cash into their business bank accounts before paying themselves or their vendors. Making those deposits is your proof of cash flow if you want to obtain funding. Paying vendors on time and filing taxes before the deadline can help, too!
Finally, it’s important to not get discouraged. Small business loans for women may not be the easiest thing to obtain. But, there are plenty of successful female business owners who have never borrowed from a bank. Stay focused on your goals and be open to a variety of lending opportunities. With a little research and a good plan of action, you can get the resources you need to achieve your goals .