TIPS TO GET BUSINESS LOANS FOR WOMEN ENTREPRENEURS
March 21, 2020
Gone are the days when big businesses enjoyed massive market shares to themselves alone, as many small businesses have opportunities to flourish now. Some of these businesses not only succeed to thrive but can also seize a good market share giving competition to bigger businesses. Though it might seem easier from the surface, it requires a lot of work to be put in to make it a success. One of the major impediments in the way of making a business thrive is a financing problem. Not everyone has a bank balance to help the new demands of their business ventures. Businesses with a weak financial background are very prone to collapse. This risk of failure can, however, be avoided with better capital available at hand.
Women owing to their gender-based difficulties in a male-dominated society are more at risk of losing their business, and hence necessary precautions must be exercised. If they can finance their business themselves, that solves the problem, but that is not the case with the majority. Women in some countries and cultures also have mobility issues so they might not prefer going through the strenuous process of getting loans from a bank. Fortunately for them, online business loan lenders can aid them in meeting their financing necessities. However, there are many other steps you can take for your financing obligations which we will discuss in this article in some detail.
Organize your finances
Loan lenders need to apprehend your financial information in detail and with some organization. If that is not the case, you are more likely to get your loan application rejected as soon as it reaches them. You should keep a record of all your major expenses like bills, sources of income and should be able to make a case for yourself how you will reimburse the loan.
Explore your current options
According to a study by Gallup, women business owners prefer three main funding options for their businesses which are personal cash or savings (85%), personal credit cards (37%) and financial gifts or support from family or friends (29%). 43% of women were open to the possibility of procuring a small business loan which is encouraging. Your banker might guide you about conventional business loans and small business loans that vary in terms.
Explore your lender options
Many banks can grant you loans, or as discussed above, there are also online loan options. You will have to go through their terms and decide which one is better for you among them. However, being a woman in a competitive market, you should prefer to go for lenders that have a record of lending to women-run businesses. In an age where gender equality is accentuated, many banks will be happy to lend loans to women to help them get a level playing field. Many of these banks and online lenders also have women-specific lending options that can benefit you a great deal.
Connect with other women entrepreneurs
Whether you are new to the field or an entrenched businesswoman, connecting with other women in the field can help both to learn from shared experiences. You can learn from them about their experience with lenders that you want to consider and decide accordingly. There are several local women business communities, look out for them, or just go online on social media, and you will find many such women. Knowing the difficulties of adjusting to a male-dominated society, many women will be willing to help you by providing the necessary loan information.
Build a good relationship with your lender
It is imperative to build a good working relationship with whoever you choose to get a loan from. Your lender must understand your business so they can provide better financial solutions to your problem. Communication is the key, and you must be very mindful of how you present your loan requirements to your lender. As these bankers or lenders have vast experience in providing loans and helping businesses establish, they can even give you sound advice about your business. It is in the utmost interest of your lender that your business becomes successful so that you keep going to them for further loans when you want to expand. This is a win-win situation for both of you so you might want to capitalize on this by creating an excellent relationship. According to a report, women-owned businesses grew by 58% from 2007 to 2018 in the US alone, and not many of them could have done it without a helpful lender.
Various methods of financing
You do not always have to go for fixed loans, and there are many other options like invoice financing and lines of credit available to you that helps a running business. In invoice financing, you can delay your payments by using invoices till they check out, so you have a running loan, and your business does not get affected either. In lines of credit, you can keep borrowing small amounts on regular intervals and keep returning them on a schedule. This contrasts with a big loan which can sometimes become a burden to clear while running a business.
In a nutshell
While it is understandable that running a business for a woman entrepreneur can be a challenging task, it is not impossible. With the right information and moving in the right direction, you can make your business an immediate success. Organize your finances, know your loan requirements, find a suitable lender, establish a good relationship, and you will have a good business that inspires other women. Good luck.
About the Author: Amber Ball
Amber Ball is a business, finance and technology blogger who spends his entire day writing quality blogs. She is a passionate reader and loves to share quality content prevalent on the web with his friends and followers and keeping a keen eye on the latest trends and news in those industries.