Were you aware that by the year 2018, women-owned businesses will produce one in three new jobs? Currently, 30% of the American market is dominated by female entrepreneurs, and this number is growing daily. Women Impacting Public Policy(WIPP) estimates that as of 2015, there were, “9.4 million women-owned businesses in the United States, generating over $1.5 trillion in revenues.” That’s a huge impact on bettering the lives of many working women around the nation, and providing more career options for the youngest generations entering the workforce.
The only problem is that traditional banks are still behind the times in terms of lending money to women-owned small businesses. A Senate Committee on Small Business & Entrepreneurship report released in 2014 advised that only around $1 out of every $23 in available loans ever makes its way to business ventures owned by women. Barriers to obtaining funds using big banks has led to the development of alternative small business loan programs that are perfect for women in business. Even women who have less than shining credit have options for lending money to grow a small business – at some of the best small business loan terms than ever before seen.
WHAT ARE SOME REASONS WHY MORE WOMEN ENTREPRENEURS CAN GET GREAT SMALL BUSINESS LOAN TERMS?
Getting a loan to start or grow a small business at lower interest rates and more flexible repayment terms is something more women can take advantage of. Today, there are many reasons why women can get their hands on the funds they need to support a strong business.
#1 – MORE WOMEN CHOOSING TO START THEIR OWN BUSINESSES IN THE NEW ‘GIG ECONOMY’
According to Geri Stengel who writes for Forbes, interest rates have dropped for commercial loans and at the same time there are more women starting businesses than ever before. A big part of this can be attributed to the ability of women to create agile businesses that the market demands. Women actually use more of their own money to start businesses than men, but they are also smart about investing this money for future goals. With small business loans offering lower interest rates and flexible repayment terms, this means more women can take advantage of borrowing.
#2 – INCREASED LEGISLATION THAT’S FOCUSED ON FOSTERING WOMEN-OWNED BUSINESSES
The https://www.nwbc.gov/National Women’s Business Council (NWBC) 10 Million Strong report advises that women are starting new businesses at the astounding rate of 1,200 per day. Much of this is due to legislation that began years ago to help create more avenues for women entrepreneurs to live out their dreams. Yet, the https://www.nwbc.gov/sites/default/files/Access%20to%20Capital%20Fact%20Sheet.pdf Joint Small Business Credit Survey Report from 2014 indicated that only 50% of small businesses that had applied for a small business loan had received any funds. The Women Owned Small Business Program of 2010, was put into action by the SBA to expand federal contract opportunities and obtain loans from the government for this purpose. More legislation awaits for getting additional women and minorities the capital they need to start small businesses.
#3 – MORE LENDERS UNDERSTAND THAT WOMEN MAKE GREAT CUSTOMERS
Several sources have indicated that women are better borrowers because they tend to make their payments on time and they are less likely to default on loan payments. An Experian study of credit scores and ratings of women vs. men to find that men generally carry higher credit card balances, are generally later on making payments, and take out larger loan amounts. Banks and other lenders are starting to see that women are very good customers and therefore have increased the number of programs available to women in business to obtain small business loans.
United Capital Source has always valued women in business and therefore has access to small business programs that are in line with the values and goals of women entrepreneurs. Even for women who have experienced credit problems, have failed in business finances in the past, or are single parents trying to make a small business dream happen.
4 – RAPID MIDDLE MARKET GROWTH RATES FOR WOMEN OWNED BUSINESSES
There are still barriers for women in positions of power, but in recent times women owned firms in the middle markets are increasing. The Middle Market Power Index, a report issued by Dun & Bradstreet and American Express indicated that women-owned companies are entering the middle markets (generating revenues of $10 million to $1 billion) at the rate of around 32% as compared to all other companies growing at 4% during 2008 to 2014.
#5 – MORE ALTERNATIVE BUSINESS FUNDING SOURCES AVAILABLE TO WOMEN
From crowdfunding to poor credit small business loans for women, there are many ways that women can start and support a thriving business. Repayment terms are highly flexible and offer the chance to borrow capital when needed. The NWBC Joint Small Business Credit Survey Report advised that 16 states have made it easier to access crowdfunding sources, and that “women are more likely than men counterparts to meet crowdfunding goals”. This is an indicator that there are a growing number of women who are supporting the start and growth phases of other women-owned businesses.
#6 – START-UP ACCELERATORS, INCUBATORS, AND MENTORING GROUPS FOR WOMEN
A number of non-profit organizations have launched in the last few years that support the growth of women in business. From acceleration clubs and incubator programs to specialized industry mentorships, women can be provided with the right resources to obtain small business loans at the lowest possible rates. Many work with networks of companies, supported by women-friendly lending firms like United Capital Source, to ensure that more women get the money they deserve to create successful businesses.
Discover how United Capital Source helps women in business obtain small business loans to create lucrative and profitable businesses. Read through our success stories of women businesses we’ve helped over the years.