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The Current State Of Small Business Loans For Women In 2013
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Female entrepreneurs are growing at an astonishing rate, and the 2012 State of Women-Owned Businesses report found that the number of female entrepreneurs has grown 54% over the last 15 years. Of course, starting a business is a challenge, and you may be searching for business loans for women to help you get off your feet, buy inventory and more.
If you can't get an informal loan from family, getting small business loans for women from a bank is your cheapest option to get long-term capital to grow. It should also be your first choice, assuming you have good enough credit.
Many female entrepreneurs turn to credit cards, which should only be used for short-term business expenses like plane tickets because you need to pay off these balances by the end of the month or face on-going debt that accrues substantial interest charges.
The good news is now is a pretty good time to get small business loans, as small businesses now have easier access to traditional bank loans according to a new report by Experian and Goody's Analytics. In April 2012, large banks approved almost 17% of small business loans, and this lending climate is continuing to improve.
If you're planning to get a loan for a new start-up, plan on putting up major collateral, possibly even your home. It will help you grow a stronger business, but it's also a very big decision. Just remember, having a healthy cushion of cash during the first few months of your business, when sales and receivables will be very slow, is very important if you want the business to survive.
The 2012 GEM U.S. Report found that female entrepreneurs are less likely than their male counterparts to seek bank financing, so women-owned businesses also close down at a higher rate. About 25% of women who closed their businesses did so because they ran out of money, while only 13.5% of men did so for the same reason.
A good place to start in your search for small business loans for women is the Small Business Administration's Women Business Centers. There are a number of small business administration loans you may qualify for, and their 7(a) loans, which can be used for working capital, are their most popular.
During your search for small business loans for women, don't be discouraged and don't be afraid to seek nontraditional options. You can turn to crowdfunding to help you find donations from fans of your business, or people who believe you have a really unique idea, for example. You can also find online lenders who can grant you a loan based on your past business performance once your business has been established for awhile. There are many options today designed especially for women, so don't be another statistic, closing your doors because you couldn't find financing.
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