FUNDING RESOURCES OF BUSINESS LOANS FOR WOMEN ENTREPRENEURS
For last several decades Women entrepreneurs have made their presence felt in business world but they were seldom recognised or publicly acknowledge a contributor's role for their efforts. Very often women entrepreneurs were indiscernible as they worked as a silent partner with their husbands or other family members. But in recent years a number of women entrepreneurs have come up to start their own businesses. Though, initially the women entrepreneurs had traditionally been in the service sector, but lately they have shown their presence into manufacturing, construction, and other industrial fields as well.
Only recently a fresh talent pool of women entrepreneurs have started forming new businesses at a fairly healthy pace again. Nevertheless, they contemplate their financial achievements as an assertion of external confirmation as their ability to start a business in service sectors as well as in traditional industries such as cosmetics, food, fashion, and personal care. In spite of everything even today, when a woman sets out to start an entrepreneurial venture, she faces challenges that are different from those that men face. As is true business funding is crucial to start a business. Nonetheless a large number of women do not possess property or assets to their name. Hence, they face confrontation while applying for loans due to lack of collateral.
In an effort to bring more equity into the capital acquisitions area, the Small Business Administration's Women's Prequalification Pilot Loan Program was introduced in 1994. As a new woman entrepreneur you may qualify for a business loan up to $250,000 to meet your financial obligations. The program also provides an SBA guarantee for repayment of your loans. However, deciding factor of your loan application is based on your character, credit rating, and ability to repay
Business funding is a crucial factor for any startup business particularly for Women entrepreneur like you if you do not possess property or assets to your name.
To start an entrepreneurial venture and for having good social standing in business world you need as much support and guidance as you can get. The situation becomes more heart breaking if your family and friends don’t step up to take some house hold and family responsibilities. As such it is almost necessary for you to have experienced mentors and role models to attain success in your endeavour.
With the emergence of women-owned businesses and subsequent creation of new jobs have influenced the American economy. Consequently, the resources to support them will continue to grow as well. For a while women entrepreneurs have been ignored by venture capitalists. But this is not the end but every end is a beginning, and there are other ways to fund their ventures.
No doubt most woman entrepreneurs had to face huge challenge for arranging adequate funding and as a result often turn to and adopt alternative like using up their savings, selling jewellery, taking loans from family and relatives etc. to fund their startup. An increase in the size and the importance of alternative lending gives established companies a wide range of business loan options.
No doubt, in spite of availability of all these resources, new entrepreneurs might find it hard to get a small-business startup loan. A market saying is “who can lend thousands of dollars to a small business in spite of the truth that you have big ideas and plans in place, but you haven’t launched yet something”.
It was unfortunate there aren’t any business loans open only to WOBs. However, recently several lenders and loan programs have come out which focus on supporting women entrepreneurs. Furthermore, there are women-only business grants, mentorship programs, and other resources that can symbolize the difference between success and failure for your company. Some will even guide and assist you find loans that are earmarked towards you and your business.
In this blog, for the sake of the record and clarity, I have grouped these WOB resources into following four main categories:
I. SBA & Government Resources for Women Entrepreneurs
SBA Loans are good for Women entrepreneurs, like you, if you need a long-term business loan and have strong credit. Notwithstanding, you will get low interest rates, in the range of 4% to 9.5% for 7 year term or longer provided you qualify. Moreover government guarantee empower lenders to consider these loans less risky and they are more likely to work with you, even if you’re just starting a business. No doubt SBA loans for women are perhaps the best types of women business loans out there, and you should strive to accomplish it.
In addition, SBA and the Office of Women's Business Ownership have collaborate with many organizations to make the best possible resources available to women entrepreneurs. If you are a woman entrepreneur interested in starting a business, applying for a business loan, finding government contracting opportunities, or improving an existing business, you can approach any of the following:
- National Women's Business Council
- Make Mine a Million
- Women Impacting Public Policy
- Association of Women's Business Centers
- National Association of Women Business Owners
- National Association for Female Executives
II. Bank Sponsored Resources
No doubt women-owned businesses are growing faster than ever. But notwithstanding which route you take to obtain financing, show meticulousness in selecting most appropriate for your business.
Following are Some Legitimate Sources of Funding for Women Entrepreneurs:
- BBG Ventures
- 500 Women
- BELLE Capital USA
- Golden Seeds
- The Women’s Venture Capital Fund
- Female Founders Fund
- Tory Burch Foundation
- Pipeline Angels
- Amber Grant
Also, have no hesitation to approach the following for further guide about additional resources:
- Small Business Development Center (SBDC),
- Small Business Administration Office (SBA), Or
- SCORE Office
III. Women-Focused Business incubator
True to the facts new women entrepreneurs have limited time, knowledge and resources therefore, they need to focus on what matters most for betterment of their venture meet the challenges of their competitors. But the rest still needs to get done and that’s where incubators can be of great help.
Business incubator is a facility established to nurture young (startup) firms during their early months or years. Business incubation programs are often sponsored by private companies or municipal entities and public institutions, such as colleges and universities. Their goal is to help create and grow young businesses by providing them with necessary support and financial and technical services.
Notwithstanding, these incubator services come at a price -- cash, equity or opportunity costs. Naturally, this is a serious business decision and must be carefully evaluated.
Following are a few prominent business incubators each of which offers a unique set of features and accommodations.
- CSI Kickstart
- DreamIt Ventures
- 500 Startups
- Amplify LA
IV. Grants and Other Resources for New Women Entrepreneurs
For Women Entrepreneurs there are various small business grants, both from government agencies and private foundations, which can be a viable source to raise start-up funds for their ventures. Following are some business grants that are meant for Women Entrepreneurs. These grants and other resources are of tremendous help to women entrepreneurs in their endeavour for arranging best funding.
Some best grants and resources for Women Entrepreneurs:
- Innovateher Challenge
- Eileen Fisher Women-Owned Business Grant Program
- Amber Grant
- Ideacafe Grant
- #GIRLBOSS Foundation Grant
- Cartier Women’s Initiative Award
- Fedex Small Business Grant
- The Halstead Grant
- Open Meadows Foundation
Some Alternative Business Loans for a Woman Owned Business may be grouped as:
Micro Finance is growing as a powerful instrument in the new economy with a clear goal of empowering women. For a woman entrepreneur who wants to start her own business but lacks funding but lack a strong track record in business, or are without collateral, the microloan is rational resource available. In fact, there are many local, state and national resources available to women entrepreneurs.Ensuing is a list of organizations that provide microloans to women entrepreneurs. It is wise to check the organisations directly and ensure to get the most updated information about what they offer.Sometimes, you may need just a small amount of capital to jump start your business. Even a few thousand dollars can, for instance, help you purchase essential supplies and inventory. Here, Microloans might be the perfect solution. Women entrepreneurs who need funding to start a new business are also eligible for some microloans.
Following is the list of the micro lenders who might be helpful to you:
- SBA Microloan Program
- Accion USA
- Opportunity Fund
- Grameen America
- Tory Burch Foundation Capital Program
- The Loan Fund
- Wisconsin Women's Business Initiative Corporation (WBIC)
- Women's Economic Ventures
- Elizabeth Street Capital
- Key Bank
2. Online Loans
Following is the list of some authenticated online lenders of small business loans for women entrepreneurs that are good for women with either strong or poor credit who need money quickly.These lenders can provide short-term 3 to 18 month loans for working capital, medium-term 2 to 5 year loans for women who can’t qualify for bank loans, and creative arrangements like invoice financing.
- Women’s Venture Fund
- Women’s Economic Ventures Loan Program
- Wells Fargo
- Operation HOPE Small Business Empowerment Program
- Opportunity Fund
- Balboa Capital
- Economic Opportunities Fund (EOF)
- PNC Financial Services
- Wisconsin Women’s Business Initiative Corporation (WWBIC)
- ROCKET MORTGAGE
3. Business Lines of Credit
Business Line of Credit is good for women business owners with strong or poor credit, who want more flexibility in using their fund. A line of credit gives you access to a specific amount of money, you need not use all of it. Just pay the interest on the funds you draw, and once you have paid back what you draw, your credit line goes back up to its original amount.
Lenders like Lending Club or Credit Junction offer low-rate lines of credit, but are harder to qualify for. However, if you have bad credit or are new in business, lenders like Kabbage or BlueVine are right choice.
4. Short term business loan or a peer to peer loan
Women nowadays are capable of running their own show and they don’t necessarily need men in the household to take care of the household expenses and to run a business or to pay the bills. Women are very strong-willed when it comes to proving to the society that they can handle the work. Providers have realised this and are offering Small Business Loans for women who have a successful business but need a little financial help.
Government backed loans and business loans from traditional banks are generally difficult to qualify for and have funding times of around 1 month. Sometimes small business need a loan with easier qualifications, a less time consuming application process, and quicker funding times. In those cases, women owned businesses may be better served by a short term business loan or a peer to peer loan for small businesses. "Mom and pop" operations have typically been the most important source growth to small businesses.
Building a business Company owned by one or more family members, raising capital from within the family and reinvesting dividends/capital gains in business infrastructure create success and growth of the company.
Crowdfunding may be defined as, “the practice of funding a project or venture by raising many small amounts of money through internet from a group of people”
Crowdfunding has become a popular tool among women entrepreneurs to raise capital for their small businesses.
There are sites like Kickstarter and Indiegogo which make you familiar to let you solicit funds through online campaigns. Such donors are offered gifts instead of pay cheque. As such, Crowdfunding is good for the entrepreneur who has launched a new product and wants to test the market and confirm that they are valuable or worthwhile.
New possibilities are also opening up for equity crowdfunding, in which you tap a public pool of investors who agree to finance your small business in exchange for equity ownership. The shareholder will have partial ownership of your company and stands to profit should the company do well.