Your Complete Guide For Start-Up Business Loans For Women

You can’t deny that women have the in-built natural talent to run a business compared to their counterparts.

If we go by the record and statistics today, over the decades we can see close to 114% of growth in women entrepreneurs running their business out in the world. Well, no surprises over there as women run a family so beautifully that it is no wonder they are good at handling finance and business.

Despite all these positive aspects, can you believe women struggle to get a loan for their start-up? Not unless they have a back-up agent who could support and navigate them through the process, women can’t get the loan amount approved.

Facts You Should Know About Women Entrepreneurs:

Worldwide close to 36% of small businesses are run by women.

The state of California, USA, has close to 1.3 million Women-owned Organizations.

Trailing behind is the state of Texas, which has more than 860,000 firms that Women run.

Approximately close to 1.9 trillion dollars are generated by women-owned firms.

Each year close to 15% growth is noticed in the firms run by women.

Why is it difficult to get microloans for women?

Globally, we do see women climbing the ladder of success and creating a name for themselves. But, at the ground level, the fact remains the same and harsh, “In the business world, women are far away from the finishing line.”

Do you know why women fail to get the much-needed support irrespective of the high rate of growth and achievement shown in various fields? Well, here a few points for you to ponder over:

1. Women are never taken seriously:

It’s a general notion and a tough one to break through. Banks and other organizations never take the new budding women entrepreneurs seriously as they do the male. Blame it on the patriarchal society or the banks’ old-fashioned vision, but it is challenging for a woman to crack through the loan process and get the loan approved single-handedly.

2. Women never take care of credit score:

Women are so tied up with expectations and responsibilities that they end up holding a low credit score and their start-up stands no chance in gaining loans. A credit score has to be maintained and nurtured right from the beginning, but sadly women ignore this aspect.

3. Lack of time:

Most banks ask for a minimum of two years of business records for any loan to be approved, between which if the business fails to show enough cash flow, there are very tiny chances of the loan being approved.

Women don’t consider their business as the main source of income due to which they fail to pay attention to these details; they ignore this critical aspect.

4. Collateral Security:

It becomes easy for any startup business loans if they have some collateral properties to support their loan documents. In case you are a new start-up, keep some property as security for your loan.

Next time you apply for a loan, make sure you pay close attention to the points mentioned above.

What kind of business loans must women look for in their start-up business?

There are various kinds of loans that women can avail for when they plan to start a new business. Below listed are the most famous and reliable ones.

SBA Loans:

SBA loans are the most famous loans that anyone can apply for. Irrespective of male or female, if they plan on starting a new business, you can blindly apply for these which are the most convenient in terms of interest rate and the loan amount.

Small Business Loans are available for any small-scale business looking for immediate cash to kick start the company or is struggling to keep the business running. These loans can be applied with intermediary lenders, who approve the loans to qualifying start-ups on behalf of the Federal Government.

Grants:

Women entrepreneurs can look for various government, or private sector rollout schemes or grants to start their new business. These grants help out the women financially and boost their confidence to start the business. The grants are aimed to socially uplift the scenario in the business world and ensure equal participation of both genders. Also, to promote small-scale businesses within the country and build the economy of the country.

Funding Circle:

It is not an easy task to instantly get SBA Loans; women entrepreneurs can look for online lenders during such scenarios. These lenders offer loans for any business facing the financial crunch and provide a short-term loan for a period of close to 3–18 months for those women who can support documents for working capital.

Funding Circle loans are for those who want a long-term loan period and look for a large amount when compared to the SBA loans. In general, the interest rate could be anything between 4–23 percent on the total amount, and you can apply for a loan amount anywhere between $25,000-$500,000.

OnDeck:

SBA loans make for the best option for women who want to kick start their start-up. But as their backup, they can always look for a Fund circle as their next option and if that doesn’t appeal to you, look for OnDeck loans.

OnDeck offers similar flexible loan options such as SBA or Fund Circle for women. You can apply for a short and a line of credit loan, with an interest rate close to 35%, maximum loan amount being $250,000 and the term period being 18 months the max.

These loans are the best option if you want immediate cash flow to sustain your business.

Conclusion:

Despite all the ups and downs between both genders, it is to be noted that many microloans are tailor-made for budding women entrepreneurs off late. Within the last two years, close to about 1,500 new businesses are kick-started by women, with a yearly graph of close to 4.2% growth in the percentage of women venturing into the business world over the past decade.

Ultimately, women are coming to the forefront and are taking over the business world with a bang. Are you a budding woman entrepreneur who has a great idea but struggling with funds? What are you waiting for? Go through the pointer as mentioned earlier and give a good start for your business.

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