Starting and running a successful business requires grit, determination, confidence, skill, and of course, money. The highly competitive business environment is even tougher for women entrepreneurs for several reasons, including bias and difficulty in accessing the information and tools they need to get the funds they require. However, this does not take away the fact that there are a plethora of women’s business loans available to female entrepreneurs. Some of these loans are discussed below.
Loans From the Small Business Administration (SBA)
The SBA, through partnerships with financial firms, offers a number of small business loans for women. These loans are available to businesses that might not qualify for other forms of funding and are relatively hard to get. They tend to have lower interest rates because the SBA puts a ceiling on how much money approved lenders can make off each loan.
Loans from a Local Female-centered Group
Many states have local groups that are dedicated to supporting women-owned businesses. An example of such groups is the Women’s Economic Ventures funds qualifying businesses based out of Ventura and Santa Barbara Counties in California.
These groups offer between $250 and $25,000 to borrowers for the purchase of assets, making of improvements to the office or store, and covering operating expenses. Loans issued here cannot be used to refinance unrelated debts, pay back taxes, buy real estate, or consolidate loans.
Loans from Traditional Banking Institutions
While men are more likely to secure financing from traditional financial institutions, banks still do lend money to women-owned businesses. However, most small business owners who try to obtain financing from a bank usually end up spending a lot of time collecting requested documents and enduring a long application process only to have their application rejected.
Peer-to-peer Business Loans
Technological advancement and the advent of the internet have led to the emergence of a number of peer-to-peer (P2P) lending platforms. Such platforms act as a bridge between small business owners who need money and banks and investors who are willing to lend.
Other popular funding options available to women in business include bootstrapping, selling equity to investors, crowdfunding, merchant cash advance, and business lines of credit.