From raising children to running for president, women have proven over and over again that they have what it takes to have it all. There are some 9.1 million firms owned by women in the United States alone, generating $1.4 trillion dollars in annual revenues, according to the National Association of Women Business Owners. But, one of the final barriers that exists for women is obtaining the capital needed to finance a business dream. Fortunately, it’s getting easier for women to get small business loans.
A LITTLE HISTORY LESSON AND AN INSPIRATIONAL WOMAN IN BUSINESS
Around 50 years ago, it wasn’t as easy for women to start businesses, let alone run them. Lillian Vernon, the founder of Lillian Vernon Corporation, one of the most popular and successful catalogue sales companies, modestly started her business from her kitchen table. But she had dreams to build it using smart financial sense, hard work, and a determination that still inspires women business owners today.
When asked about her success in a recent interview, Ms. Vernon said, “The 21st century is a good time for women, especially women who want to branch out on their own and become successful entrepreneurs.” When she started out, the only way women were considered for small business loans was through their husbands or fathers. Nowadays, women business owners can confidently get the funding they need to build their dream organizations without having to worry about sexism in the lending market.
THE PATHWAY TO BUSINESS SUCCESS IS A LOT SMOOTHER
Many women today are eager to start small businesses so they can juggle the responsibilities of career and motherhood. Others just want to see their ideas come to reality, because they have great business models. Whatever the case may be, getting the right funding to launch and grow a viable business often starts with small business loans. Consider that this method works in favor of women business owners in several ways, including:
- A larger infusion of cash, sooner than trying to save up money over a long period of time
- Establishes a solid line of credit to make it easier to get business vendors and partners on board
- Separates personal finances from business finances from the beginning
- Easy and flexible repayment terms for small business loans to help control cash flow
- The ability to help the business flourish when other businesses fail
We call this a pathway to starting a small business the right way, without all the risks, and establishing solid business practices early on.
IT IS GETTING EASIER TO GET A SMALL BUSINESS LOAN AS A WOMAN
For many women, the option to take out a small business loan is a lot easier today. It’s not just about going to a bank to be scrutinized either. There are multiple choices in small business loans available. It’s easier to get the money needed for a business for a number of reasons.
First, financial institutions now see women as responsible and capable business owners so they are more likely to approve loan requests. Pay attention to some of the marketing campaigns and advertisements that are targeted at women today and you’ll see that these once male-dominated organizations are spending a lot more time trying to earn the business of women.
Secondly, interest rates have dropped very low, and repayment terms are flexible – making it much more affordable to take out a small business loan, even for a startup. Lastly, more women are advocating for starting businesses through powerful women-run networks and organizations. There are even groups of female-only investors and seasoned women business owners who coach other women how to get started.
GETTING A SMALL BUSINESS LOAN AS A WOMAN ENTREPRENEUR
The entire process for women to get small business loans isn’t overly complex. Financial firms are keen to bring women onboard as business owners, therefore they have special programs just for women. Education about the available options for women who need working capital is vital, which is why United Capital Source is dedicated to sharing accurate information about small business loans and other business financing news.
Some ways that women in business can get small business loans may include:
Traditional Banks and Credit Unions
For women who have an established relationship with a bank or credit union, the choice to pursue a small business loan going this route may seem like a no-brainer. However, traditional banks will have a long process, including an in-depth review of credit worthiness, possible need for collateral, and several references. Interest rates may be low, but repayment terms are strict.
Government Small Business Loans for Women
Some women may seek initial funding through government small business loans and grants. The truth is, a woman may face a long process that is very invasive, and the loan amounts will be limited. The Small Business Administration offers some small business loan programs, but they do not issue grants – those must be obtained by non-profit organizations and some state programs. Be prepared to complete a litany of paperwork if you choose a government loan.
Alternative Lending Organizations
For those who don’t have a lot of time to wait for approval through a bank or government program, or if there are any credit challenges, there are alternative lending sources for women. Small business loans for women based on business performance, rather than on credit, are the way that many women-premiers get the funding they need. Loan terms can be determined by the amount of the loan, repayment schedule, and other factors such as receivables and projected business growth. Caring financial representatives can work with each woman to secure the right type of loan to make this process as painless as possible.
Most of all, women business owners are treated with 100% respect when they seek out small business loans using this method. There’s no risk to find out how much money can be secured. The freedom to grow the business is an amazing experience for any woman, so why wait?