Where to Find Small Business Loans for Women
Article summary: As much as commercial banks, the press and the government talk about it, you would think that getting small business loans for women is more difficult. The truth is that it isn’t much different than it is for men. It still comes down to your existing revenue and profit plus having collateral to back up the loan or line of credit. If you already have good cash flow, good collateral and lots of time, then a bank is the way to go. If you have $400,000 or more in yearly revenue but no collateral, then you should take a look at Financing Solutions.
Doesn’t the Small Business Association Offer Small Business Loans for Women?
Yes, the SBA does have programs to try and get money out to women and minority owned business. However, there are numerous disadvantages.
The SBA doesn’t actually grant the loans. They just try to make it easier for traditional banks to work with small businesses. And commercial banks are still going to want to see existing cash flow.
A SBA loan will take a ton of time to get in place. To get banks to work with you, the SBA has a rigorous approval process. They will continue to ask for additional paperwork and financials to prove you can repay the money. Working with the SBA is really just an additional approval step that slows everything down. As a result, it could be months between when you start the process and when you actually get your funding.
When you get small business loans for women from the SBA, it affects your credit. For example, since you probably don’t have enough collateral from your business to secure a business bank loan, you will most likely have to use the equity in your home. This is basically a lien against your home, which is the kind of information that gets reported to credit agencies and may lower your score. When this happens, it will be even more difficult for you to obtain small business financing in the future.
Are There Good Alternatives to Small Business Loans for Women
If you have this drive to start your business, it is best to start your business slowly with your own money, other people’s money, or using a loan from friends or family. Once you are well established, you will need some real capital for real growth.
Since the 2008 recession, there has never been a time in U.S. history where getting access to capital for a business has been easier. The answer lies with alternative lenders. This option has several advantages.
1. Over the last 10 years alternative lenders with private money are now providing financing for existing small businesses with cash flow. These opportunities are readily available for businesses and nonprofits with $400,000 to $5 million in yearly revenue.
2. Financing Solutions (www.financingsolutionsnow.com) provides lines of credit that cost nothing to set up and is inexpensive when used. It only requires a 2 minute application.
3. While commercial banks have scaled back their lending to small businesses companies like Financing Solutions have filled that gap and made it easier. Why go to a commercial bank, where you have a 70 percent chance that you will be turned down?