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If you are a woman looking for a business loan it’s time to get the facts straight so you do not waste your time. Below you will find many of the different options available in detail so you as a business owner can make an informed decision about what is best for you. We have provided a small list and brief explanation about many of the business financing solutions available for women but by no means the all end list so you can continue to do research and we hope this resource will act as a great springboard for your efforts.
The first topic of discussion regarding business financing for women is the Small Business Administration. The administration’s main function is to represent small businesses in government. In order to fulfill this representation they promote and support many programs to assist you with the starting of a business and resources to help you after you launch your business.
The Small Business Administration DOES NOT offer financial grants for opening a business or expanding it. There are also very specific business requirements to receive a grant and the money is generally allotted to non-commercial organizations. Some examples would be educational institutions or not-for-profit organizations.
The SBA does not provide business loans directly, what they do is guarantee loans given by participating banks and financial institutions. Some startup or expansion loan examples offered through the SBA are the Basic 7(a) Loan Program or the Microloan Program. Both of these loan programs are again very restrictive and allow for loans to specific types of businesses such as child care centers or rural area businesses that might assist in stimulating job growth or some other form of community improvement. There is a very thorough application process for these types of business loans.
The SBA does have a very good resource called the Office of Women’s Business Ownership. This particular resource offers women professional training and counseling in business in order to assist them in developing a company. It is hard work but you will learn tips on how to garner government contracts as well as business administration skills. This is a good resource for women who are determined to start a business but lack the required knowledge and many of the skills necessary.
The term grant is used quite often in regards to women and minorities and it is often misunderstood by aspiring entrepreneurs as a way to get free money to start a business. There are countless organizations that offer grants but it is important to understand that this type of funding is offered for specific circumstances and they are very restrictive. You have to go through all the grants available to see if it is possible that you fit the criteria of thesegrants for women.
It is not necessary to provide the names of banks as they are household names so the discussion here will be the question of availability of these types of business loans. As many of you know the economy is struggling and this as had a severe impact on bank lending policies. The truth is that if you do not have a very good credit history and a substantial amount of assets you are likely to be denied any size small business loan. It must be emphasized though, you should by all means make the attempt if you believe you might qualify because only with a bank will you receive some of the lowest borrowing rates. It is a very lengthy application process but it can be well worth it if you are approved.
This is one of the most flexible business loans for women available today. This is technically not a business loan; it is an alternative to business loans. This type of financing is only available to existing businesses that generate revenue on a monthly basis. The merchant cash advance company provides a bulk payment upfront against a portion of future sales generated by the business. There is a fee for the advance and both principal and fees are paid back by a daily percentage deducted from each sale the business makes, usually via the credit card processor although lately there have been advances structured deducting the business bank account called ACH loans.
This business loan alternative has one of the fastest turnaround times and a very simple application process. A one or two page application and the business must provide recent monthly statements. Credit history is less scrutinized because the business cash advance is based off the monthly revenues and not the individual. This means that bad credit applicants have the chance of being approved. Although the premium will be much higher than a bank because of the risk involved, but it is very quick and make a big difference in developing your company if used correctly.
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