It’s no secret women entrepreneurs face an uphill battle when it comes to getting financing. In fact, the Kauffman Foundation, a leading think tank on entrepreneurship, recently released a report which found that 80% of female business owners had to use their own savings when seeking funding. There has to be a better way! In this article, we want to explore some of the best options for female business owners to get money fast.
First, let’s look at some of the facts about female-owned businesses in the U.S. Did you know that female-owned businesses added $3 trillion to the economy every year? In addition, 20% of all small businesses in the U.S. with sales of $1 million or more are owned by women. Don’t take my word for it. These figures come from the Center for Women’s Business Research run by the National Women’s Business Council (NWBC).
As you can see female-owned businesses are big business. However, traditional lenders don’t feel that way. Many banks actually see female business owners as risk. This is unfair and equal access to finance is something that needs to be addressed.
Fortunately, it is not all bad news on the financing front for female business owners as a number of options exist on the market today. In fact, a number of lenders have started to specifically cater loans to female-owned businesses.
Many of these programs actually work with business owners to help them structure the loan or line of credit in a way which makes the best sense for the business and a number of agencies also provide coaching and support to female entrepreneurs.
The first thing to know when you are looking for money fast is to understand how this money will help your business. Short-term loans for short-term needs and long-term loans for long-term needs. Or so the saying goes. As such, you don’t want to get a 6-month loan for something you will need years to pay off.
You also want to check your credit score and there are a number of resources where you can do this without impacting your score. One of my favorites is the 3-bureau credit report with FICO from Experian. While it costs $39.95 it is not tied to any lender, so there is no hard sale attached. Another plus is that this query will not show up on your credit report.
Did you know that credit report request from lenders will actually show up on your credit report? As such, it is better for you to pull your own report first as this will help you when you research lenders and when they prequalify you.
Once you know what you need the money for, how you plan to repay it, and your credit score, it is time to look at which lenders and which programs are the best fit for your needs.
This is also the time to look out. Whilst a number commercial banks have set up special offices to help finance female business owners, their processes tend to be extremely slow and the application process usually requires a lot of paperwork. Also be on the lookout for some of the more unscrupulous lenders in the space who are targeting female business owners in an effort to make a quick buck. These lenders are nothing more than predators and should be avoided at all costs.
That being said there are a number of organizations that are helping female-owned businesses. These groups offer loans as small as $500 and they have flexible requirements. Many states also offer programs specifically for female business owners – and they should as you are the own paying the taxes.
You can also look at the number of alternative finance companies out there. This is one of the fastest growing segment for small business finance in the country today and a number of funds have special programs just for female business owners. Some of these lenders also have streamlined application processes and even structure the repayment schedule to better fit the needs of your business.
No matter which option you choose to get money fast, you want to make sure it is the right fit for you and your business. Check the terms and compare your lender of choice with other lenders. Also, reach out to former customers to find out more about their experience. Remember if it sounds too good to be true it probably is.