A number of government agencies, non-profits and professional organizations offer business startup loans to women in an attempt to foster good relationships, create jobs and stimulate the economy. To truly understand the requirements of outside organizations, individuals have to acquaint themselves with the types of financing available to new entrepreneurs.
Offering advice and counseling for free, places like the Small Business Association, or SBA, and the Association of Women's Business Centers provide training as well as put women into contact with sources of funding for their startups. Despite needing to meet specific criteria, women worldwide can qualify for business grants and unsecured business loans.
Qualified women can borrow money for their businesses in the following ways:
Secured Business Loans
Collateral is put up by the receiver of the loan in an effort to protect the lender's investment. If the recipient defaults on the loan, the bank can seize the item, commonly real estate, as a form of repayment.
Unsecured Business Loans
No prevention measures are taken to protect the lender but the interest rate is higher than a secured loan. This type of funding is given to women with a solid financial background and exemplary credit history.
Small loans are given to start-up businesses and have a very specific timeframe for repayment. The average loan size is $13,000, but startups can request up to $35,000 from intermediaries that are approved by the SBA.
Available through local and state programs as well as non-profits, grants must be matched by the entrepreneur or combined with other means of funding like a loan.
Requirements That Must be Met to Attain a Loan
- Good Personal Credit. Business owners need to know a thing or two about managing money before starting out on a venture of their own.
- A Solid Business Plan. A roadmap highlighting possible successes and failures, not to mention a clearly stated plan of action, gives investors a way to measure a start-up's staying power.
- Work Experience. Past opportunities can help entrepreneurs cultivate the skills needed to be a successful business owner.
- An Educational Background. Related coursework will strengthen a small business.
- Proof That the Business Has Longevity. Researching competitors and giving direct examples regarding risks and profits is one way that women can help their chances of being approved for business startup loans.
Where to Find Additional Information
- The Small Business Association (SBA) has local chapters throughout the United States. Workshops, pamphlets and podcasts make it easy for women to get the information that they need regarding funding for their start-ups.
- WomenBiz.Gov caters to women who use their businesses to sell to the Federal Government. Easy-to-navigate and full of useful information, start-up businesses stand a better chance of succeeding with federal contracts after visiting the agency's website.
Securing finances for their start-ups is one way that women can keep afloat amongst their competition. From unsecured business loans to private grants, funding is available to those entrepreneurs who are willing to ask for it.