Only about one in every four female entrepreneurs seeks a business loan. Government guaranteed SBA loans and alternative internet financiers have simplified things for female company owners.
Especially for those who are unable to acquire financing from a bank to obtain the loan.
In this article, we'll go over the most suitable ways for women to acquire small business loans. And perhaps some alternative funding choices as well as other resources for female entrepreneurs.
Overview Of Small Business Loans For Women
It may appear that funding your business is as straightforward as applying for a loan and receiving the funds.
However, if you are a woman and own a company then you may find it more difficult to obtain funding than you think.
That is why we are here. We sifted through hundreds of lenders to uncover the top small business loans for women.
This strategy will not eliminate the gender gap in loans but it may help level the overall competitive balance for any woman owned business.
The Best Small Business Loans For Women
As a government institution the SBA assures small business loans. Nevertheless, the SBA doesn't issue such loans. Rather the loans are made by banks and other direct borrowers. And that is how the SBA subsidizes part of the loan if a default occurs.
Getting a loan from SBA is an excellent financing choice for women who qualify. As they provide low interest rates and long-term funding. Mostly seven years or more than that.
The SBA microloan program provides modest loans of up to $50,000 to startups and small companies.
The SBA 7(a) loan program provides general purpose investment money to small firms that have been in operation for several years.
SBA Community Advantage loans are a component of the 7(a) program and have far more lenient conditions. This makes them a viable alternative for women-led businesses.
The SBA 504 loan program especially offers funds for the acquisition of commercial property or machinery.
If you need a relatively long-term loan with higher amounts and more leeway than an SBA loan then consider Funding Circle.
Funding Circle provides small company loans for women in sums ranging from $25,000 to almost $500,000 for one to 10 years.
A Funding Circle loan has interest rates ranging from 4.99 percent to 15.99 percent. You may get your cash in five days of qualifying and completing your documentation.
OnDeck provides both a relatively brief period loan and a personal loan. For example, you may borrow up to $250,000 for up to 18 months. And APRs as cheap as 35% on short term loans.
A short-term loan from OnDeck is ideal for female led firms that want quick liquidity to pay significant and unexpected costs.
Amounts up to $100,000 are available through the OnDeck line of credit with periods of one year and APRs as low as 35.9 percent.
If you need a company loan to stabilize working capital or meet other financial needs then OnDeck line of credit is a great alternative.
BlueVine provides invoice factoring in amounts up to $5 million for up to 3 months and a rate of interest starting at 0.25 percent each week.
BlueVine takes three or maybe more months in processing. A credit record of 530 or above is required. As well $10,000 in monthly income for firms that seek invoice factoring.
BlueVine's application is quick and easy to complete. They finance small business loans for women in two to seven business days on average.
BlueVine is a terrific choice for female owned companies as well as any business owner who requires flexible and rapid finance. Because it has a smaller time in the company's needs than other alternative lenders.
It's vital to realize though that the lower your payment history and the sooner you need cash and the more costly it's going to be with BlueVine (or any other lender).
You should ensure that you can afford any cash that is provided to you and apply with numerous lenders to see which provider can give you the best deal.
Alternative Financing Options For Women
Small Business Grants For Women
First and foremost a company grant is "free money" given you will not be required to repay the funds received when you're with a loan.
Usually, grants are significantly more limited in terms of qualification standards and what you may utilize the cash for than small company loans.
Based on your financial needs you might even want to look into grants. Particularly as there are awards made expressly for women owned companies.
VC Firms And Angel Investors For Female Entrepreneurs
Instead of asking for a company loan or a grant you might choose financial leverage.
When an entrepreneur seeks funds from venture capital (VC) companies and financiers this is referred to as equity financing.
Investors receive a piece of your company's ownership (aka equity) in exchange for financing.
Partnering with an investor can be a wonderful choice if you require a substantial amount of funding to open a business or grow your current one. And one could benefit from some sound business advice along the road.
Additional Resources For Women Owned Businesses
Other services are available for businesswomen in addition to business loans, grants and financial choices. Among these are:
These organizations offer a variety of tools for female entrepreneurs ranging from training programs to networking events.
The Bottom Line
There is still discrimination between male and female entrepreneurs. There are even more funding opportunities for female-led enterprises than there have ever been.
Finally, the best funding for your company will be determined by a number of variables, especially considering your unique demands, credentials and so on.
Consider how much you can manage. Research what you are eligible for and choose what works best for your company.