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Secrets of Small Business Loans for Women Entrepreneurs

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By Jared Weitz Posted Tuesday 26, 2016 In Funding, Industry Niches, Management

Secrets Of Small Business Loans For Women Entrepreneurs http://www.unitedcapitalsource.com/blog/secrets-of-small-business-loans-for-women-entrepreneurs @UCSourceYou don’t have to be in business long to realize the importance of cash flow. Growing businesses also need money to invest in expansion or new assets. Small business loans can help women entrepreneurs reach their goals. But uncovering the secrets of accounts receivable loans and other forms of small business financing can be daunting.

Here at United Capital Source (UCS), we’re bullish on small business. We’re here to take the mystery out of small business loans to help you find the money you need. There are many special programs designed to support women entrepreneurs. But men, take note here. You, too, can take advantage of these secrets to grow your small business.

The U.S. Small Business Administration (SBA) has many programs to help businesses grow. They say, “ensuring that your business always has the financial backing it needs is essential. Knowing the most efficient and cost-effective way of generating funding can make or break your revenue stream.” Why is that important? “Finding loans specific to small businesses, both secure and unsecure, can boost your bank account and keep your business in the black.”

At UCS, we meet many small business owners who are confused about the world of small business loans. There are so many myths out there. Our job is to help you get the facts., and uncover the secrets of small business loans. Then you’ll be prepared to consider different types of business financing.

  1. Small Business Loans are More Available Than You Think

And, you don’t have to go to a bank to get one. In fact, banks cannot accommodate many small businesses, even though they say they like the idea of supporting women entrepreneurs. And smaller community banks often try to woo local businesses.

But banks require strong credit and profitability to make business loans. You won’t be eligible if you have bad credit or unpredictable cash flow. Banks also shy away from inventory financing. They see it as too risky.

The Charlotte Business Journal reports that “only about 20% of small business loan applications to large banks are getting approved today. And even at small banks, which tend to cater to local businesses, only 50.3% of loans are approved.”

So you may be able to get a merchant account loan or business line of credit. But your “cost of capital” might be expensive. Without excellent credit, you’ll pay a higher interest rate. That’s money you could spend directly on growing your business instead.

All that being said, there are alternative types of small business financing. Many of these options are actually better for small-but-growing businesses. Alternative lenders can help you find:

  • SBA-backed business loans
  • Short term business loans, usually for just a few months
  • Business lines of credit
  • Inventory financing
  • Accounts receivable factoring
  • Merchant cash advance programs

It’s heartening to know you have so many options. But how do you compare them? We can help. Here at UCS, we know almost everyone. But we aren’t tied to anyone. Our only concern is what’s best for your business. What’s best long term, not merely for today. We don’t work with startups. But if you’ve been in business six months or longer, we would love to work with you. We’ll match you with a program that is a great fit for your business. Even if you have bad credit. 

We loan from $5,000 to $5 million. You can be approved within 24 hours. You can receive your money within 72 hours. You can get on with your business without missing a beat. You’ll have the right type of business loan, and the right size loan. We know that borrowing more than you need harms your cash flow instead of helping. And we're in this with you, for a long-term relationship.

We even structure repayment options to fit each business. You can choose what works best for your cash flow. That might be:

  • A percentage of credit card transactions
  • Daily payments
  • Weekly payments
  • Bi-weekly payments
  • Monthly payments
  1. One of the Best-Kept Secrets is Accounts Receivable Loans – or Revenue Based Business Loans

You can use small business loans for many purposes:

  • Purchasing new assets such as equipment or real estate
  • Remodeling, repairing or expanding your facility
  • Purchasing inventory for manufacturing or sale at retail
  • Recovering from a disaster

Often small businesses need money to support ongoing operations. But, your income may be delayed. For instance, it may take two or three months to collect your medical billings. Or your income fluctuates. That’s often the case in construction and retail. Or for restaurants that depend on seasonal tourism. These situations are frustrating for business owners. You can’t spend revenue you have not yet received. But you need cash to manage your business now.

Accounts receivable loans solve this problem. With this type of financing, you sell your receivables to another company at a discounted price. This is called factoring. It gives you the cash you need to maintain daily operations or invest in something new. But it’s not a traditional business loan. You have no recurring payments to make. And none of your assets are at risk as collateral.

Today, more small business owners are using accounts receivable financing to smooth cash flow. It’s predictable. It’s repeatable. That allows you to plan your business spending more wisely. This type of business loan is also useful when you need a quick infusion of cash. For example, your restaurant just scored a huge catering job. You need extra cash right now to purchase enough ingredients and supplies. Accounts receivable financing is perfect for this.

Merchant cash advance is another type of accounts receivable financing. It is based on your credit and debit card transactions rather than outstanding invoices. Both this and factoring are usually simpler and cheaper than using small business credit cards.

  1. Grants Are Nice, But Limited

Business grants are almost always a one-time opportunity. They’re nice because you don’t have to repay them. But there will be lots of paperwork, both before and after. That can take valuable time away from running your business.

Grants are awarded for specific types of projects or purposes. That might be new product development. Or new market development. For example, Huggies Brand offers “Mom Inspired” grants for new innovations “inspired by the joys of motherhood.”

Even though they can be hyper-specific, grants may still be worth looking into. Think of them as a financial “booster” for something special. Not as a loan to sustain your business. Winning a grant can also bring your business valuable publicity.

There are many places to look for grants for women entrepreneurs. One example is WomanOwned, which is a web-based membership organization. Their database includes information on thousands of business grants. It is also a resource to find state-specific business development assistance and funding. You’ll have to join to check it out, though.

  1. Women Entrepreneurs Are Considered a Minority

That makes you eligible for certain small business loans and other support not available to all businesses. Of course, you don’t have to be a woman to be a minority or otherwise “disadvantaged” entrepreneur.

The Minority Business Development Agency says “access to capital remains a major barrier to many minority-owned firms.” This agency is part of the U.S. Department of Commerce. They offer educational resources to help develop your business as well as help you obtain funding. The SBA’s Office of Women’s Business Ownership (OWBO) also offers extensive resources to help women entrepreneurs grow their business. Although the OWBO focuses on economically or socially disadvantaged women, they assist all woman-owned businesses.

  1. You Don’t Have to Go It Alone. And You Shouldn’t

Successful entrepreneurs know they don’t know everything. That’s why putting together the right team is so important. You need the right advisors as well as the right employees.

Knowing about funding options is critical for small business owners. Having a cash flow specialist on your team can really help. (Hint: we think you’d be hard-pressed to find a better cash flow specialist than our UCS team of experts.) But who else do you need on your small business team? Successful women entrepreneurs surround themselves with smart, innovative mentors.

Why choose UCS as your mentor for small business loans? We assign a dedicated account rep to you. He or she will help you explore small business financing options. We’ll help you evaluate those options. You won’t have to waste time shopping for resources. You can stay focused on your business at hand.

  1. You Don’t Need a Sterling Credit Score

Alternative business lenders are not like traditional banks. They are impressed by factors other than high credit scores and serious profitability. Here at United Capital Source, we are happy to work with you if you have bad credit. We understand that your business may have cash flow problems. Of that you don’t have many assets – or any assets – to use as collateral.

Those things should not keep you from getting the small business loans you need to grow. Our team of experts knows what it takes to operate a successful business. We are also leaders in the lending industry. We spend time getting to know you and your business. That’s important because each business is unique. We want to learn about your history. Your goals. Your short-term and long-term needs. That way we can match you with the business financing option that fits you best. That’s what sets us apart.

Of course, you want to set yourself apart, too. The Small Business Administration has some good advice for you. They say, “The way to convince lenders who provide small business loans for women is by showing them that you possess the drive to overcome adversity. Having that fighting spirit matters.”

Any lender can get you some kind of business loan. Most consider the process a simple transaction. A one-time deal. We don’t see you that way. We see each customer as a long-term relationship in progress. We want to help you now and in the future. That way, we’ll be around to support your fighting spirit. And to help celebrate as you grow.

  1. Don't Wait Until You’re in Financial Trouble

An article in Inc. quotes Sabrina Parsons, who is CEO of Palo Alto Software. Her company makes financial products for small businesses. She says, "Sixty percent of small businesses that fail are profitable when they fail. They just don't have the cash flow."

All too often, small business owners wait too long to get help. Small business loans aren’t intended to be a rescue resource. Use them as an ongoing cash management tool.  

UCS can’t help you if you’re already sinking. No one can. This is one more reason to develop a long-term relationship with a lender. In our case, you will get a single strong relationship (with us). And you’ll have access to a multitude of lending options. You can find the best fit, depending on what you need at the time. That might be accounts receivable loans today. And it might be inventory financing later on. Some day you may need a long-term business loan to purchase a new building.

Growing your business is hard work. Some days it can get you down. When that happens, check out Make Mine a Million. It’s a website for women entrepreneurs with revenue goals of more than $1 million. You can read inspirational stories about women who have made that happen. (Men, you’ll be inspired, too.)

When you’re re-revved up and ready to take your small business to the next level, we’ll be here for you.

We’ll help you uncover the secrets of small business loans and then match you with exactly the right lending program.

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