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Women are great, and they are doing commendable things, especially new age women entrepreneurs. They are everywhere, starting and growing businesses all across United States of America.

23 July 2018

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Small Business Loans for Women

It is said, “behind every successful woman is herself”. Well, we couldn’t agree more!

Women are great, and they are doing commendable things, especially new age women entrepreneurs. They are everywhere, starting and growing businesses all across United States of America.

According to data from Kauffman, 40% of new entrepreneurs in the US are now women, and the number of new women-owned businesses is growing at double the rate of male-owned businesses. (Source: https://www.fundera.com/business-loans/guides/small-business-loans-for-women )

However, as per a US Senate report, it is still difficult for women to get small business loans compared to men which is surprising because women alone own more than 11.3 million of the businesses in the United States, contributing to almost 1.6 trillion in revenues.

(source : http://www.womenable.com/content/userfiles/2016_State_of_Women-Owned_Businesses_Executive_Report.pdf)

The lack of funding options is discouraging for women entrepreneurs, considering the fact that one in every four business women seeks a business loan.

It’s unfortunate that women still struggle to find financial resources to help grow their ventures. What makes it more discouraging is that it comes easy to most business men.

So much for equality!

However, there are a few lender programs supporting women entrepreneurs. Some of them are “women only business grants” and “alternative financing options for women”.

Here is a list of some popular funding options for women business owners-

  • SBA Loans for Women: The Small Business Administration (SBA) offers government guaranteed loans to small businesses. It does not give the loan by itself, rather banks and other direct lenders give away these loans, partially subsidized by SBA – in case the borrower defaults.

SBA loans for women are low interest loans for women for long term financing of 7 years or  more.
These are a great financing option for women entrepreneurs, provided you qualify for it.

There are other small business loans by SBA, such as SBA Microloan program, offering a small amount of loan to startups                and micro businesses.

The microloan program can be used by you to buy initial inventory or machinery for your  business.
All in all, SBA loans are great, but it’s not for everyone as they have a strict qualification criterion and SBA loans require a lot          of documentation.

The loan is not the right option for anyone looking for immediate funding as the process of loan approval can take months.

It is best for women who have strong credit and are seeking a long-term funding.

 

  • Online Loans for Women: Online loans are great for women in dire need of cash. They allow you to borrow quickly for a short term or medium term, especially if you are unable to qualify for bank loans.The best part is that they quick, and tailor made as per your need. These can be processed in as little as a day, with term depending on your requirement and credit score.The only thing to remember is that credit here is inversely proportional to interest rate. The better the credit score, the lower the interest rate, and vice a versa.Some of the popular alternative online lenders are Funding Circle, Lending Club, OnDeck and Kabbage.

 

  • Business Lines of Credit: Business Lines of Credit are best for women who want flexibility in usage of funds, as it gives access to specific amount of money, which may or may not be used in full.The best part about this type of funding is that you only must pay interest on the amount you draw. And you are free to repay the amount as and when you want, making your credit line go up to the original amount.To get a low interest line of credit, one must have a good credit score as it can be really expensive for women with less than satisfactory credit score to use Business Line of Credit for funding their business.

 

  • Micro Loans for Women: For sole proprietors or women running small businesses, Microloans are a perfect solution. With Micro loans, you can borrow a small amount of money to invest in the day to day operations of the business.There are many micro loans available in the market such as- SBA Micro loans, Accion, Opportunity Fund, Grameen America, Tory Burch, Kiva.Many states and cities in America have their own network of micro lenders, which can be accessed through business groups around you.
  • Federal Business Grants for Women: A Business Grant is free money, which is why federal grants are specific and limited to only a few industries, such as medical research, agriculture, and technology.In some Federal grants, women business owners can repay money over the years in the form of easy installments thereby helping them repay the money as the business flourishes.There is a lot of paper work for a women entrepreneur to apply for federal grants and when the money is disbursed, the business owner might have to provide regular updates with reference to financial performance of business to get future grants for their business.The reporting is required for government to ensure the money is used in the right place and is indeed, used for the purpose it was granted for.Some of the popular federal business grants for women are SBA InnovateHER challenge, Small Business Innovation Research (SBIR) and Small Business Technology Transfer (SBTT) Programs and Rural Business Investment Program.

 

 

 

  • VC Funds and Angel Investors: If you require a large amount of money to start or scale up your existing business, then there is no better option than seeking investors to raise equity financing rather than debt financing.As a woman it might seem challenging to convince a venture capitalist, but fortunately enough there are many women owned VC firms focusing on funding women entrepreneurs specifically.These are some of the VC firms and angel investors investing focusing on women entrepreneurs- Female Founders Fund, Merian Ventures, Astia, Golden Seeds, Women’s Capital Connection, 37 Angels, Belle Capital, Belle Capital.

 

  • Crowdfunding: Crowdfunding is the process of raising money where a lot of people come together (crowd fund) to help you raise money for your venture. The concept has gained a lot of popularity in recent time with success of websites such as Kickstarter and indiegogo.As per a recent survey, women entrepreneurs find it easier to raise funds via crowdfunding than male entrepreneurs as they were considered more trustworthy. The above research result was backed by a PWC report according to which, crowdfunding campaigns by women were found to be 32% more successful than male led crowdfunding campaigns. (source : https://moneyish.com/upgrade/why-women-are-more-likely-to-get-funded-on-kickstarter/)

 

  • Alternative Financing for Women: For women let down by traditional financing options, alternative financing is the most convenient and flexible option.Alternative Lenders like ‘Evergreen Funding Solutions’ offer collateral free small business loans to women, despite their credit standing.This is an easy financing option as there are not many eligibility requirements. The biggest advantage in alternative financing for women is that there is something for every women entrepreneur, irrespective of their credit score.


Funding Challenges for Women entrepreneurs

Despite the above-mentioned options of funding, women are still struggling to find footing in the business world. As securing funding for women owned businesses still remains a challenge.

However, here are some insights into why women entrepreneurs might be struggling-

  • Industry: Female entrepreneurs choose low-growth industries like retail, with about 10% of women-owned businesses fitting into the retail category—and making up 30% of all retail businesses. (Source: https://www.fundera.com/business-loans/guides/small-business-loans-for-women )
  • Underestimating capital needs: Women are frugal when it comes to estimating their business capital requirements. And surveys in the past have reinstated this belief. They are conservative with their estimates, underestimating their requirement.
  • Societal factors: Only 11% of executives at VC firms are women. Which means that rest of the 89% are men. Hence, they might not be able to understand women and their ideas or may not take them very seriously. For glass ceiling still exists, especially for women entrepreneurs.

How to Handle it?

Well, acknowledging the problem is the first step. Calling attention to the problem with #me too campaigns is helping to shed the light on the plight of women entrepreneurs, especially when it comes to funding.

To make things better, women must rely on each other; networking with other women entrepreneurs. Here is a list of some alternative resources to help women entrepreneurs get funding and otherwise.

About Evergreen Funding Solutions

We strongly believe women make the world a better place, which is why at ‘Evergreen Funding Solutions’ we facilitate them.

We offer small business loans to women who own and operate their own business. For we believe in every such woman, despite her credit standing.

Evergreen Funding Solutions is the forefront of alternative business financing, offering collateral free small business loans for women, ranging from a few hundred dollars to up to one million dollars.

We have multiple funding programs for business women depending on their credit rating; premier and premier plus funding programs for women with satisfactory credit and standard and starter programs for women with bad credit.

We are an alternate financing organization with unconventional approach towards lending.

At Evergreen Funding Solutions, we believe in simplicity, efficiency and a no non-sense approach to business financing. Our professionals consistently ensure quality and effectiveness.

We offer high-level service to any type of business.

We are passionate about helping you swim across the murky waters of business uncertainty and finance.

Unlike so many financial institutions, Evergreen Funding never leaves you hanging in the middle. We have a dedicated team of professionals that will immediately respond to your questions and queries through phone or email.

Also, at Evergreen Funding, we delegate a dedicated business financial consultant to your case, who acts as single point of contact, who knows your business and will guide you on how to best incorporate the right product.

Our application process-

  1. Apply for a product online – it will just take you 10 minutes. Provide us with some important information regarding your business and ownership.
  2. Based on your correspondence with our finance professionals, you will get a decision within hours to analyze whether our funding options make sense for your business operations.
  3. Upon mutual agreement, the next and final step is to sign all the documents authorizing the funds. We will then credit the funds to your checking account.

 

SOME RESOURCES TO HELP WOMEN ENTREPRENEURS WITH FUNDING

Here is a list of some invaluable resources to help women entrepreneurs with their businesses. They might be able to help you secure funding, but mostly they can help you network and learn about businesses in general.

  • The SBA’s Women Business Centers (WBCs): SBA’s are everywhere, and they can help you with mentoring, networking, training etc. to give you an edge when it comes to seeking funding.This can be really empowering for women entrepreneurs as it can lead to unconditional support from other women in the business.
  • One KC for Women: One KC for women is a consolidation of various organizations to help women find resources, connections and opportunities for business.

 

This may be able to give you that little push you need to make it happen.

 

  • National Women’s Business Council (NWBC): The NWBC holds business competitions, conferences, accelerators and training programs throughout the country and also online.
  • National Association of Women Business Owners (NAWBO): The NAWBO offers virtual networking, best practice sharing, and training resources for women business owners.
  • Other Local Resources: Make the most of local meet ups, women’s chamber of commerce meetings, and Lean In circles across town. For there is nothing better than networking with likeminded business women to make your business grow.