Starting a new business or growing an existing one requires capital. Many banks and financial institutions offer programs that are designed to support women-owned businesses. These programs typically include business loans such as the 7(a) and Express Loans and can also involve grants tailored to women-owned businesses. Some programs require personal guarantees. Banks Most banks and credit unions offer small business loans, including those designed for women. These can be either term loans or lines of credit. The requirements vary by lender, but may include a minimum number of years in business, revenues and cash flow. In addition, lenders may require personal guarantees or collateral. Nonprofit lenders and community financial development institutions, or CDFIs, often offer alternative financing options to women business owners. These can include microloans and invoice financing (also called accounts receivable lending). These options typically have lower qualification standards than traditional bank or SBA business loans. Women-only financing is also available from some lenders that specialize in serving female entrepreneurs, or through women-only incubators and accelerators. These programs usually provide a combination of funding, workspace and mentorship. Some of these programs have a specific focus on the needs of women entrepreneurs in certain industries, such as retail establishments, restaurants or business services. These programs can be a good option for business owners who can’t qualify for standard loan offerings, like those from the SBA or other online lenders. SBA Women who seek to start or grow a business can tap into the resources offered by the Small Business Administration (SBA). This government agency does not issue loans itself, but it has partnerships with banks and other lenders who do. SBA loans typically come with lower interest rates than other financing options and have more flexible repayment terms. The SBA offers a range of resources to help women entrepreneurs, including counseling services and low-cost training courses. It also has more than 1,800 Women’s Business Centers nationwide where women can access mentoring and guidance. The SBA sponsors more than 100 grants to organizations that provide business development and financing for women, such as the Wisconsin Women’s Business Initiative Corporation. The SBA has a number of programs that support women-owned businesses, including the 7(a) loan program and Express Loans. These programs feature below-market interest rates and ten-year repayment terms. To qualify, women must demonstrate that funding is not available from other sources and sign a personal guarantee. Alternative Lenders Women-owned businesses contribute greatly to the economy, but they still face challenges when it comes time to secure financing. That’s why it’s important to explore all of your options. For instance, many online lenders offer business loans for women. These lenders typically offer higher loan limits than traditional banks, and they are more flexible in the way you use your funds. Online lenders also have shorter application processes than traditional banks, which can save you time and money. Another option is a merchant cash advance (MCA). This type of funding isn’t technically a loan but instead lets you borrow against your future credit card receipts. However, this financing option is often more expensive than other types of financing. Finally, consider applying for a small business grant. Federal, state and organizational grants offer financial support that doesn’t require repayment. They’re a great choice for those looking to expand a new or existing business. Be sure to review grant guidelines carefully before applying. Long-Term Loans Many traditional banks and credit unions have business loan programs specifically geared for women. These typically come with favorable interest rates and longer repayment terms, as well as the flexibility to tailor financing options to meet the specific needs of your company. The SBA also offers multiple types of financing for women through their suite of business loans. These include the SBA 7(a) and Community Advantage loans, which offer general-purpose working capital, and the SBA microloan program, which is designed for startup and micro businesses. If you need to buy equipment or commercial real estate, consider the SBA 504 loan program. This provides a lump sum of money, with terms that range from 10 to 25 years. Women-owned companies also have the option of applying for small business grants, which don’t require any repayment. However, the qualifications for these programs can be stricter. They often require proof of business operation and a personal guarantee. In addition, the application process can be time-consuming.
