Women in Small Business
Did you know that women own nearly 12 million American businesses? They also start their businesses about five times faster than the average American small business. We know from experience that women are just as hardworking, smart, and focused as the men doing the same work. If that’s the case, however, then why do women struggle to get small business loans? Frankly, it’s because of discriminatory and outdated ideas about women in business. Many banks haven’t quite caught up with the times. They still rely on old loan approval methods. Here are some of the reasons why banks and other sources still turn down business women who seek loans.
Less Personal Funding
On average, women don’t put a lot of their own personal dollars into their businesses. Men, on the other hand, tend to use their own funds when starting their businesses. Bank owners often reason that more personal funding = more commitment to the business, so they’re more likely to give loans to those who have invested more of their own money. They don’t consider the reasons – such as financial discrimination, family care, etc. – that a woman may have to spend her money elsewhere.
Women are statistically more likely than men to go into people-focused businesses. These include things like restaurants, lodging, and tourism. Banks see these businesses as high-risk endeavors. Wanting to avoid as much risk as possible, they avoid lending to these businesses.
Lower Credit Scores
Historically, the credit system hasn’t favored women. Did you know that women couldn’t even apply for their own credit scores until 1974? While we’ve come a long way since then, the system is still catching up. That’s why women’s credit scores tend to fall about 20 points below their male counterparts’ credit scores these days. Some banks require near-perfect credit scores for their loans, which ultimately hurts women in business.
At United Capital Source, we don’t believe in discriminatory practices. We think it’s time to level the playing field. That’s why we have a program that focuses on small business loans for women. If you worry about getting a loan elsewhere, we want to make life easier for you.
Compared to other loan types
|Loan types||Max Amounts||Rates||Speed|
|Merchant Cash Advance||$7.5k – $1m||Starting at 1.09||1-2 business days|
|SBA Loan||$50k-$10m||Starting at 5%||3-5 weeks|
|Business Term Loan||$10k to $5m||Starting at 5%||1-3 business days|
|Business Line of Credit||$10k to $250k||Starting at 8%||1-3 business days|
|Receivables/Invoice Factoring||$50k-$10m||Starting at 5.8%||1-2 weeks|
|Equipment Financing||Up to $5m per piece||Starting at 5%||3-10 business days|
|Revenue Based Business Loans||$10K – $5m||Starting at 9%||1-3 business days|
United Capital Source
Ready to get your fair shot in the business world? Then let’s form a partnership today. Apply for your loan online today, give us a call, shoot us an email or start a live chat. Let us help you take your business to the next level!