As women are beginning to outpace men in the workforce, you may be thinking about running your own company. If that's the case, start looking for small business loans for women. While men have often been running the show, women are beginning to outpace men in the workforce, and your timing may be right. Getting a small business loan is tough no matter who you are, and you may not find cash specifically for women only, but this list can help you find opportunities.
One way to finance a small business if you don't need a lot of up-front capital is to use your credit cards. However, make sure that you don't go overboard. Have a plan and a budget so that you don't sink yourself into debt.
Borrowing From Family or Friends
Another option is to borrow money from family or friends. Operate on a purely "business" level; put everything in writing. Keep in mind that your relationships may come under pressure if you borrow money from people who give you more advice than you would like to have or if you run into problems paying the loan back in a timely manner.
Consider taking out a personal loan from your bank if you have a good credit rating. Borrowing from your bank will be easier if you have assets in addition to that credit rating. Be ready to supply the bank a business plan when you apply for a loan.
The Small Business Administration (SBA)
While the SBA doesn't actually fund loans itself, it does work with lending institutions. The SBA offers several different types of loan packages. The most commonly used SBA program is the Basic 7(a). This program is very flexible and can be used by both start-up and existing businesses. Your loan can be used for business reasons such as buying machinery and equipment, as working capital and for renovations or new construction.
If you have a terrific idea and plan, you may be able to attract a venture capitalist. On the good side, a venture capitalist can invest money into your business, along with helping you network with other people and businesses that can help make your organization even more successful. On the down side, a venture capitalist will not only own a portion of your business, but a venture capitalist will also probably want to be involved in how you run your business. Of course, this is only a down side if you have dreams of being solely in control of your idea and the organization that supports it.
Many business owners apply for loans or lines of credit without any thought to their own personal credit histories. They mistakenly believe the loans made to their businesses will have no impact on their personal credit and that they cannot be personally liable for the business loan.
The simple fact is that when you want to start a small business, you will almost always be needing a business loan. Even if you have the initial capital needed to start the business, it is necessary to then have quite a bit of money on top of that secured to cover the expenses for at least the first year of that business (since many small businesses take many months before they finally start to become profitable).
It's possible to get an unsecured small business loan, but you'll need good credit, a well-written plan and the ability to sell yourself to the lender.