How to Get a Small Business Loan for Women

It is estimated that 4 out of 10 businesses are owned by women in the United States. However, what you may not be aware of is that it can be notoriously hard to get small business loans for women. It has been found that applicants are less likely to get business loans for women. These loans for women to start a business to not only better their lives and follow their passions, but to also help grow their local economy. Whether you are new, have bad credit, or just have struggled to get a loan, there are options for women to accomplish their dreams of opening their own business.

How Does a Woman Apply for a Business Loan?

If you have struggled in the past to get a loan, you may be wondering how you can apply for a loan. There are alternative funding options, which typically have a similar process for the application process. The process is generally very quick and simple, allowing women to get the best terms possible for their loan options.

The process starts by completing an online request form and submitting it. Then, a loan specialist will contact you to explain the process of getting alternative funding and ensuring that you have all of the details about how this process will work. At this time, you are able to ask any questions that you may have. When you feel as though you understand the process and feel confident in your decision to move forward, the loan team will work with you to help in any way that they can to get you the loan solutions that work for you.

From there, you will need to make sure that you fill out your application properly and submit it for approval. You can apply online, making it an easy and convenient way to apply for alternative funding.

How to Apply for a Small Business Loan for Women?

You can use this form to apply for a small business loan or other funding options. After you apply for a loan using this secure online form, the loan officer will closely look at your information to determine the best lending solutions for your specific needs. There are plenty of factors that need to be considered and a loan officer is highly experienced and knowledgeable to offer you the funding option that works for you.

After deciding on which solutions are best for you, the loan officer will then identify and select the best alternative funding lender. When the lender is selected, the application will be submitted to them to review. There are cases where you can end up with an approval or decline decision in less than a day. If approved, you may be asked to provide further documentation, such as a copy of your lease or mortgage, a voided check, or your state ID/driver’s license. They may even ask for other financial information, such as tax returns.

Very quickly after you have started this process, you can quickly receive your funding in just days. You can then get your repayment schedule as agreed upon by the lender quickly so that you can start your plan for repayment.

This can be a complicated process for people to go through, which is why you can trust that the loan officer is there to help you through every step of the process. They are there to answer any questions that you may have at any point during the process. This can give you the peace of mind that you need through this process that you will get the funding that you need with terms that can work best for you.

Why Getting a Loan Can Be Difficult

There are a few reasons why you may have some difficulty getting a loan. One reason is that your business has just launched or is not even a year old yet. Getting a loan if you haven’t been open for at least a year can be extremely difficult. Lenders are looking to loan money to businesses that have a strong financial track record, and ability to repay debt and a reliable direction for your business. Alternative funding options such as crowdfunding and microloans can be a good option to consider. You could also consider options like personal loans or credit cards to help get your business the funding you need.

Your credit score can also impact your ability to get a traditional small business loan. This is particularly true if your credit score is between 300 and 689. Bad credit makes you a lending risk for lenders, which is why it can be hard to get loans. If you can get a loan with bad credit, you will end up paying high interest rates. Still, some people go this route anyway because they need the funding that badly.

Small Business Funding Programs for Women

Just because you can’t get funding through the more traditional approaches doesn’t mean that you can’t get the funding your business needs. Alternative funding solutions exist to help people accomplish their dreams of starting their own business or expanding an already existing business. In this section, you can get a close look at some of the various options that you have to get the funding that your business needs.

Merchant Cash Advance

If you have a small business that just needs some working capital, small business loans from a traditional bank may not be the best option for you for a few reasons. For one thing, it can be a time-consuming and complex process for loan applications. There are also very strict terms and requirements for the loan, which may impede your ability to get the capital that you need. It may also have a structured repayment plan that could negatively impact your cash flow and any plan for growing your business in the future.

Merchant cash advance options are a good option to consider for this purpose. You can get the working capital that you need without struggling to stick to the strict repayment plans that small business loans require. The repayment schedule is calculated based on future percentages of credit card transactions, giving you an easy to manage and flexible solution so that you can continue to fund and potentially grow your business.

Unsecured Business Line of Credit

Unsecured business lines of credit are another great alternative to traditional small business loans. You can get the working capital that your business needs while giving you the flexible repayment options that you are looking for. There are several benefits to choosing this option. One option is that you get greater control over your money. When you get a small business loan, you get the loan and your repayment schedule will be based on the entire amount of the loan, whether you use it or not.

However, with an unsecured business line of credit, you borrow only what you need to when you need to and pay based on the money that you borrowed. This is also not a one and done loan. You can continually repay and borrow against this line of credit as you need to. This versatility and flexibility can make it an excellent solution.

Unsecured and Secured Business Loans

You can also get options for unsecured or secured business loans. The unsecured business loan is offered to business owners and is based on their “creditworthiness” instead of based on collateral. In order to get this type of funding, you will need to have a good personal credit score in order to get approval. The benefit of this type of option is that you won’t have to put any of your valuable assets up for collateral in order to secure the funding that you need. The downside to this option is that you will likely end up with a much higher interest rate since this is a risk for the lender.

Secured business loans are the traditional type of loans, which do require collateral. Typically, this collateral will be based on the asset that is already owned by you or an asset that you are in the process of acquiring. These are typically term loans, meaning that you have a shorter repayment schedule than what you would get with a small business loan.

Equipment Leasing/Financing

Another option is equipment leasing or financing. This option allows the business owner to choose between financing or leasing the equipment that they need to purchase. The primary difference between these two options is ownership - the business owner retains ownership over this property. When you lease equipment, you can essentially rent the equipment from the vendor for a monthly fee. However, during this leasing term, you do not own this property. With equipment financing, you do own the property and it is used as collateral for your monthly payments. Once you pay off the loan, you will own the equipment.

SBA Loans

SBA loans are widely considered to be the “gold standard” of business loans. SBA loans are government-backed loans that the Small Business Administration (SBA) partially guarantees. Typically, one would use an SBA loan to refinance debt, working capital, financing the growth of your business, and purchase any equipment that the business needs. An SBA 7(a) loan is used to purchase real estate, equipment, an existent business, or a construction project associated with the business. These can also be used to refinance any existing obligations.

A 504/CDC loan is used in order to purchase land, improvements to the building, an existing building, long-term machinery/equipment, and the construction of a new building for the business. Microloans offer up to $50,000 in short-term funding for businesses.

Commercial Real Estate Investment Loans

This option can offer business owners commercial mortgages from between $250,000 and $5,000,000 for commercial real estate. These funds can be used for various commercial real estate needs including automotive, daycare center, bar, restaurants, retail, and office space.

Business Loans that Use New Market Federal Tax Credits

Another option to consider is funding that uses New Market Federal Tax Credits. This is a funding program that is supported by the government to help develop in those often underserved areas across the country. The idea of these loans is to bring in technologies, businesses, and jobs into areas where people have issues getting the investment capital that they need. The catch is that the businesses that are being launched must be in an area that the government considers underserved.

Cannabis, Hemp, & CBD Business Loans

The cannabis, hemp, and CBD businesses are becoming more popular across the country. However, it was previously complicated to get funding for these industries. This solution was specifically made for these types of businesses, offering financial solutions for financing the cultivation, retailing, packaging, and production for the cannabis industry. These business loans can give you the much-needed help that your business needs.

Grants

In addition to these various alternative funding solutions that you can choose from, you could also try your best to get grants to help your business out. There are a variety of grants that are available from the local, state, and federal governments which offer businesses a certain amount of money. What’s great about grants is that this money is awarded to qualifying applicants, rather than being money that is borrowed.

The problem with this option is that there is a lot of competition to get these loans. You can most commonly find grants with the Small Business Administration, but there are other organizations that offer grants such as NAV and National Association for the Self-Employed. There are also grants that are specifically made for women entrepreneurs.

Small Business Funding Resources for Women

There are organizations that are specifically there to help women achieve their goals of being entrepreneurs. The goal is to help more women be able to successfully start and grow their businesses, getting help that they may have otherwise had difficulty getting. These are some of the resources that you can look into to help you increase your chances of success.

OWBO (Office of Women’s Business Ownership)

This is an organization that strives to help women entrepreneurs using programs that are coordinated through their local SBA offices. These can be crucial programs for women to take advantage of and include counseling, business training, access to necessary credit and capital, and federal contracts. This organization also oversees WBCs (Women’s Business Centers), which strives to make the playing field level for women entrepreneurs who would otherwise struggle to make it in the business world. These centers give women the assistance they need to increase their chances of success, especially since businesses that get help from WBCs have better success rates than those businesses that don’t.

Funding for Women-Owned Small Business

There is a program known as the 8(a) Business Development Program, which was designed to help small and disadvantaged businesses compete with other businesses in the market. You can find information on these programs from the WBCs as well as other local assistance resources to learn more about this help and finding capital. They can also help you get valuable advice and counseling to help you create the perfect path for your business as well as what funding options will work best for you.

WOSB (Women-Owned Small Business) Federal Contracting Program

This is a program that was made to help women who own small businesses get federal contracts. They can help you understand any eligibility requirements before you apply to these contracts. The Small Business Administration works with various federal agencies, which will increase the ability of women in this program to land these contracts. There is actually a 5% contracting goal that the government has to contract women-owned small businesses. There are even match-making events to help match agencies with women entrepreneurs.

NWBC (National Women’s Business Council)

The NWBC is a non-partisan council that offers advice to Congress, the SBA, and the President. This is the only place that offers an independent voice for women business owners, handling complex and essential economic topics.

DreamBuilder – The Women’s Business Creator

The goal of this program is to offer its participants all aspects of owning a business. They carefully craft a curriculum that engages the participants and gives them the valuable education that they need to succeed. This is offered in both English and Spanish, creating opportunities for women. When women have completed this program, they get a business plan to either start their own dream business or to develop an already existing one.

Conclusion

The unfortunate reality is that women do have a harder time getting traditional funding, which is why alternative funding can be the perfect solution. There are plenty of different small business funding programs and resources for women to take advantage of to make their dreams of opening their business come true or get the help that they need to keep their business afloat. These options are also great if you want to grow your business. There are options available to you and with the help of an experienced and knowledgeable loan officer, you can find the perfect funding solution and lender for your specific needs.  You can find such an experienced person in Drew Cashmere – give him a call to discuss your needs: 786-544-2700.