It is not a secret anymore that securing a small business loan is tedious battle whether an applicant is male or female. However it is bit more tiresome for women in this male dominating world. Reports have shown that bank loans for female entrepreneurs fell to 70% in past few years. A lady was reportedly saying that we represent strong financial background to get our business loan passed but they rejected because we were in business for less than 5 years. They approached commercial lenders afterwards for small business loans for women and after few formalities they were through it.
Why Women Start Their Own Businesses?
Women plan to start their own business for a whole lot reasons. Being a women entrepreneur is challenging and honorable on both professional and personal corners of life. Moreover, becoming a business owner add more fun and flexibility to their daily life. They can enhance their income and careers by starting a venture. The very obvious reason is that they can stay independent in this male dominating world.
How to get small business loans for women venture
For What Reasons Do Women Need Business Loans?
Like male business owners, female entrepreneurs also take business loans to make a profitable investment in business to extend inventory or pay resources for operational costs. Running a venture is costly endeavor, so it becomes necessary for women business owners to make sound base with good capital investment. It is not always possible to have enough capital at personal end to invest in, that’s why they plan to borrow small business loans.
USA economy reports state that $1.2 trillion economy is raised by women entrepreneurship. So, commercial lenders think of encouraging female business ownership in the nation. Women leadership is full of business core qualities then it is not wise to let down national economy just keeping them finance deficient. They just need a little economic push up which can be offered by financial institutions. So, if you are a woman and planning to start up or extend your existing business then apply for business loans for women to make your dreams come true. Following are chief points to be kept in mind while applying.
- Establish strong business relationships
Small business loans lenders want to ensure that businesses they are investing in is trustworthy. That’s why it is very necessary to have strong contact in your business community. You may be little new but your business prestige must be sound to impress lender. Especially for women business owners, it is must to have established and loyal business network. Part of a trusted business and building relationship can be time taking task but a business owner must invest in it for bright future. Being new in industry, your connections will witness your growth and reliability.
- Organized Financial Statistics of Business
History says that nothing will treat you with loan rejection so quickly as bad financial presentation will. Experienced business owners states that lenders need to verify financial status thoroughly via complete discussion. So, it is mandatory to stay formulated with organized financial reports, business charts and documentation. It will also demonstrate that you are always ready with your homework for next step. Just make sure that billing details must be on time and business owner must be able to explain how fruitfully she is going to invest borrowed loan amount in business.
- Be Ready with Collateral
Women business owner may also be asked to pledge some collateral for secured loans so be ready with that too. That can be in form of real estate or liquidity. So, make sure that you already have some cash before apply for more. It is required so that if in any case business owner fails to repay back then lender can compensate his amount with that collateral. It is necessary that collateral must be of same value equals to borrowing amount.
- Explore all Lender option before finalizing one
Before making any final financial decision, find out all possible borrowing options with the lender. Financial advisers say that a business owner should spend some quality time shopping around for reliable and best lender that suits her needs. Even though loan request may be eligible, you may face many difficulties if you have not done complete research. Authorized small business lenders can be much more personal if you find good one, so chances of getting loan are more with them.
- Find out women specific lending plans
Women tasks are always competitive no matter in which field they are trying do something. Same is the case with small business loans, female entrepreneur face lot of problems in getting approval. However, some concerned commercial lenders have started special programs for female business owners to make funding easier for women. So, a women entrepreneur should always look for best funding program available for him.
- Figure out what you actually need and prove you’ll utilize it well
An applicant must be able to explain clear vision of her business gal for which she want to borrow small business loan. Prove your financial stability and experience in front of lender. Vague loan request may often put lender into suspicion. So, be prepared with specific information to ensure loan approval. Knowing how much funds you need are completely baseless for lender if business owner is not capable of explaining that why does he need that? This is why a dedicated business plan and financial statements are asked by lender.
For What Reasons Do Women Need Business Loans
Qualification Criteria for small business loans for women
The business owner must:
- Be eligible as a woman-owned business.
- Be capable of owning and managing 51 percent of the business.
The business must have:
- Annual sales not exceeding $15 million.
- Age of at least two years.
- Funding needs of less than $2.5 million.
Acquiring business loan is though a tiring task but with appealing business experience and strong financial health, a women business owner can qualify for business loans in USA.