The business world comprises women-owned businesses making up 39% of the 28 million small businesses currently operating in the nation’s economy. The U.S Census Bureau also discloses that the amount of women-owned businesses rose by 45% from 2017 to 2016. Unfortunately, their relevance to the economy and communities isn’t simultaneous to equal access to small business financing.
A study from the New York Federal Reserve shows a 64% funding gap between their businesses and those of their male counterparts. According to a recent study from the New York Federal Reserve, 64% reported a funding gap. As a female entrepreneur, the odds of getting a sustainable means of financial aid is low hence the need to know the various business loans for women available.
Financial Options Available to Women Entrepreneurs
From business grants to loans, here are some small business financing options available to women entrepreneurs today;
Small Business Administration Loans (SBA Loans)
SBAs are one of the most desired loans in the small business world, which women business owners can harness to finance their businesses. A lot of traditional loans exist but might not go far in meeting the needs of these enterprises. The SBA is a good option as they guarantee bank loans for qualified applicants, thereby encouraging banks to extend rates that would have been left for bigger businesses.
- Women-owned businesses that do not qualify for traditional loans could qualify for these loans.
- There are capped interest rates available.
- They offer various small and large loan amounts.
- These loans could require collateral.
Crowdfunding is amazingly one of the few areas in the business field where women might likely receive funding than men. A study from Berlin showed that women were more likely to attain their crowdfunding goals 14% more than men. The success rate reveals how various funders view women differently from other lenders and capitalists. Crowdfunding sites go beyond free giveaways to platforms that offer peer-to-peer equity and lending opportunities.
- It serves as a fast way to raise funds without any upfront payment needed.
- Investors can track business progress, and women entrepreneurs could get good feedback.
- The business campaign might not always succeed.
- Business ideas could be stolen via these platforms.
Online Lending Platforms
Online platforms have been established over time that understands women business owners better than traditional lenders. They also offer flexible requirements when offering loans making them a significant source of business loans for women. Women’s credit scores over time have been revealed to be considerably lower than that of men, thereby making these platforms better options for them.
- Business owners get to compare different loan offers quickly from any location.
- Women business owners often get great rates and terms.
- There might be the unreliability of new online lending platforms.
Credit cards are an unusual but effective source of business loans for women. They serve as short-term loans they could harness with no interest as long as they could harness as long as they pay it back quickly.
- It is easily available to the business owner.
- It doesn’t require any collateral to access loans.
- It is prone to misuse by business owners.
Major Grants for Women Entrepreneurs
Another major source of business loans for women can come in the form of grants which organizations offer to aid their startups. Grants, although they may be competitive once you qualify for them, it serves as a stable source of funds to finance your business. Some organizations that offer these grants include;
- The National Association for the Self-Employed Growth Grants.
- FedEx SmallBusiness Grant.
- It mostly comes with free access to helpful information to aid your business growth.
- It could be seen as free money with no down payments required.
- These sources of finances are not usually renewed.
- Some of these grants often come with strings attached.
The business field has always been a competitive one, but women have taken to it with confidence and diligence. With the available business loans for women and other financial sources from fintech companies, there is guaranteed to be a continuous rise in the emergence of these enterprises.