Business Financing for Women

Women-owned businesses face challenges when applying for small business financing. With more and more businesses owned by women it is important to understand that there are some challenges to be faced. Today, women are not limited to traditional methods of small business funding and can choose from numerous solutions for their entrepreneurial needs.

Whether you are about to open a business, or are looking to expand your operations, here is everything you need to know about securing business financing as a woman business owner.

Business Loans from Alternative Lenders

With a business loan, your woman-owned business can thrive. You can get the financing you need for equipment, payroll, inventory and much more. Unfortunately, getting a loan through certain mediums can be challenging. Applying for a business loan through a bank can be time-consuming, and many small businesses don’t get approved. Alternative lenders come in handy who specialize small business loans. Through an alternative lender your business can get a loan that is tailored to you.

Peer to Peer Lending

Peer-to-peer lenders pair borrowers with lenders through online marketplaces. After applying for a loan, your information will be posted online, and investors can decide if they want to buy some of your debt. Once the lending company funds your loan with investor money, they give a check, so you make payments directly to the peer-to-peer lender without dealing with investors.

Having anonymous investors make money off your loan is not ideal and you would probably prefer to gain fast access to cash without sharing your private information online. Other options offer women owned business funding at similar rates and terms, there are few advantages to peer-to-peer lending from a borrower’s perspective. If you are in a crunch for cash this is another option to consider.

Grants for Women Business Owners

There are grant programs available for women-owned businesses. You can apply for these grants, and you will be considered among fellow female business owners who are also seeking financing. You can also research federal grants, and other opportunities within your geographic location or industry.

SBA Loans

SBA loans are popular because they are issued by traditional banks and are insured by the SBA. SBA insurance makes these loans less risky for the lenders to issue and that translates to more competitive rates for borrowers.

SBA loans are a good option if you have time and patience. It can take several months for approval decisions to be made and because it is the bank’s standards that govern approval of your loan, borrowers can be approved for a loan by a lender and denied for the same loan by another lender.

The SBA Express Loan program offers a higher chance of approval and is faster, but you’ll need collateral, a 700 or higher credit score, and records showing that you’ve got a successful operating business to qualify.

Credit Cards or Lines of Credit

Women-owned businesses need fast cash to meet payroll, buy inventory and pay for other expenses. Due to this, women business owners will use credit cards or lines of credit. The biggest risk with these funding sources is that they you are vulnerable to the lender’s decision to cut your credit line or call your note without notice.

The Bottom Line

Once you have investigated the types of funding available for women business owners, there is at least one right financing option for your business.