The revenue generated by women-owned firms has been steadily rising over the last few decades (79-percent since 1997). And according to womenable.com, 30% of all businesses in the U.S. are owned by women. Plus, the National Association of Women Business Owners reports that one in five firms that make more than $1 million in revenue, is woman-owned. The glass ceiling is definitely on its way to being cracked, if not shattered altogether.
But no matter what gender you are, odds say you’ll need extra working capital for your business at some point. If you’re looking for funding for your company, we have compiled a list of important points that you may find useful. Read on for information about small business loans for women.
There are organizations out there filled with women just like you — women who have worked hard to build up a successful business. Some of these organizations might provide you with grants and loans, and joining or working with them might help you meet important people within your industry:
You may find it beneficial to align yourself with one or more of these organizations. Of course, they may not all be applicable to your situation. But many groups like these are there to help women excel in the economy. Sometimes this involves helping women find good sources of working capital through small business funding.
The U.S. Small Business Administration (SBA) offers valuable resources to women. One such resource is DreamBuilder, an online training curriculum built in partnership with the Thunderbird School of Global Management. The curriculum has 22 courses designed to help women develop important business skill sets.
Since 1979, the SBA has been offering women-owned business loans through their Office of Women’s Business Ownership. The office offers help through training and counseling, financial resources, federal market opportunities, and local SBA resources.
According to Business.org, here are some of the best small-business loans a business owner should be on the lookout for.
In addition to government assistance programs, there are a number of grants that offer small business loans for women.
Women who have poor credit may find it harder to receive loans. In fact, some studies have shown that women often average 20 points lower on their credit scores than men do.
While conventional banks and credit unions may have strict application requirements, alternative lenders may be able to provide more accessible funding.
Women who fall into this category can try applying for a small business loan from a lender that may accept lower credit such as BlueVine, Kabbage, Rapid Finance, or Loan Builder, and see if they are approved.
Minority-owned businesses are classified as companies who are employing 50 people or less and are owned by a minority group member in relation to race, gender, ethnicity, socio-economic status, or physical ability. Those in rural areas and those who identify as military veterans can also be considered minorities in some cases.
The Minority Business Development Agency provides grants and new business loans for women who are in minority groups. They have Minority Business Centers that provide one-on-one counseling about business loans. Interested applicants can enter their state information to find the closest loan resource to them.
If your business does not qualify for an SBA loan, look into an online lender. Online lenders will offer three to 18-month loans, invoice financing, and medium-term loans as well. Some will offer small business loans ranging from $25,000 to $500,000 and terms of up to 5 years. Rates may be from 4.99% to 22.99% or higher, and funds are transferred within five business days after applying and qualifying for the loan.
You will need to have a credit score of 600 and be in business for two years to qualify. Luckily, some lenders won’t ask you to meet an annual revenue requirement. Another benefit is that online lenders often have a faster and easier application process compared to your average bank loans or SBA loans for women.
So far we’ve listed some of the biggest resources out there for women in business. While large organizations are certainly useful, sometimes you can build stronger business relationships when you join a local, community-based group.
If you can’t find a local organization that makes sense for your company, you might consider starting your own. You could begin with something as simple as a website that invites people to email you for more information. If you start to gather enough interest, you could take it to the next level. This kind of networking might just elevate your professional status in your area.
There are quite a few venture capital firms that offer funding to female-led businesses. To name a few:
Women face several challenges when applying for a business loan or grant. For instance, they are not taken as seriously as men. According to the Small Business Administration’s Office of Advocacy, “36% of all businesses in the United States are owned by women. all of whom are the primary source of income for over 40% of households in the US. 99.9% of these businesses are categorized as “small businesses,” as they have less than the 500 employees required to be considered a big business.” Almost 100% of small businesses are run by women. This means that banks are not lending money to as many female-led businesses, as historically, the majority of businesses are led by men and financed by men.
If your business is fairly new, it may be challenging to take out a loan. Women who are just starting out their new company may need financing immediately but will not qualify if the business has not been operating for at least two years. Banks want to know your business is already doing well before lending you more money. However, this is a bit of a conundrum since a business without any funding is likely to struggle in the first place.
It will be much harder to receive funding if you are just starting out. However, you can increase your chances by reaching out to lenders that work with startups. Microloans can be a good place to start.
Most successful businesses get successful by taking advantage of the right opportunities. And that can mean applying for special financial products geared toward you. As long as there are women’s business organizations out there, it makes sense for women-owned companies to use those benefits.