Today, 40% of all entrepreneurs in the US are women. But, unfortunately, these numbers do not line up with their access to small business loans. In fact, many female entrepreneurs today find it quite challenging to take a loan.
However, lack of funding is not a reason to put your dreams on hold. After all, there are more than a few ways to overcome financial difficulties with business loans, and take advantage of special programs for female entrepreneurs.
Between 1972 and 2018 the number of female-owned businesses increased 31 times. Even so, women still are facing some tough challenges when it comes to financing their business. For example:
- Female entrepreneurs get less funding than men
- Women tend to rely on personal sources of income more than men
- Women are less likely to apply for small business loans
Organize Your Financial Information
Lenders need to verify all the financial information and documents you provide to them, which is why it’s extremely important to organize your tax returns and profit and loss statement. By doing so, you’ll show your lender that you’re a responsible person worthy of having a loan.
Small Business Loan Options for Women
When you apply for a small business loan, you may face competition and other challenges. In fact, some lenders offer specific women-oriented loan programs that can help you receive funding.
Here’s an overview of the four best small business loan options for female entrepreneurs:
- SBA loans are guaranteed by the Small Business Administration. They provide loans with lower risks and fair interest rates under 10%, and are typically payable from 7 up to 25 years. But before you apply for an SBA loan, you need to define how much money you need. Your business will be more successful if you know exactly how much funding you need rather than getting whatever they can give.
- Online loans are a fast and flexible option for women who need to receive funding very fast. Bizit.com offers reviews on various lenders that provide online loans which could be approved on the same day. Usually, online loans are short- or medium-term — with higher interest rates than usual for poor credit. But there are more options available for female entrepreneurs with longer terms.
- Microloans are a perfect solution for female small business owners who need a little boost of capital to jumpstart their business or those who run solo ventures. Even a relatively small amount of cash can help you to purchase inventory and supplies for your startup, for example. And if you need more, there are also non-profit lenders that are willing to provide microloans as high as $50,000.
- Business-government grants for women are particularly attractive because they don’t require repayment. Of course, the competition for grants is fierce, but you’ve got nothing to lose by applying for them. There are various grants available for women at the government-, local-, state-, and private-levels.
Hopefully, you’ll find that these tips will help you organize your financial documents, receive proper funding, and kickstart your female business.
Photo Credit: stock photo