The Best Funding For Women Owned Businesses
We scoured the internet for the very best funding for women owned businesses. There are many fantastic choices which women can make use of today. These are some of the greatest business loans for women we have seen.
Funding for Women Owned Businesses: Collateral-Based Financing
Collateral-based financing offers low rate financing. Personal credit quality and profits don’t determine your approval. Some accepted collateral includes:
- Account receivables and purchase orders
- 401k, IRA, stocks, and bonds
The idea behind collateral-based funding is that a lender needs an assurance. For the creditor, a great assurance that you will pay back funding is when your property is at risk if you don’t.
Funding for Women Owned Businesses: Cash Flow and Unsecured Financing
Cash flow financing are other great kind of small business loans for women, if you’ve been in business one year or more and have $10,000 in monthly revenue.
Unsecured financing is readily available for female small business owners, for up to $150,000. You can get an approval if you have good personal credit and get 0% intro rates for 6-18 months … even as a startup.
So, this can work as an answer to the question: how do I apply for women business loans?
Funding for Women Owned Businesses: The Small Business Administration
The SBA offers some terrific business loans for women including their 7(a) loan for working capital. To get approved you’ll have to have:.
- 3 years of company and personal tax returns
- Good personal, business, and bank credit
- Collateral for 50-70% of what you’re borrowing
The SBA Express program is a great loan program for women. You can get approved for a loan up to $350,000. Get rates of 4.5-6.5%. Get a line-of-credit good for 7 years. No collateral is required for up to $25,000. There is a turn-around in 36 hours.
SBA’s Women’s Business Centers
They can help you get access to capital. See: https://www.sba.gov/tools/local-assistance/wbc
You may be wondering, SBA loans for women what kind of business can I start? These are loans for women to start a business and they mean nearly any type of business.
But be aware: these are not business loans for women with no paperwork! These are the kinds of loans for women business which involve a lot of details. That’s one issue with the SBA. Still, it’s one way how to get business loans for women.
Funding for Women Owned Businesses: Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE)
For women who are also military veterans, the Veterans Women Igniting the Spirit of Entrepreneurship (V-WISE) is an SBA funded program offered by the Institute for Veterans and Military Families which includes online training, a conference that utilizes the unique team spirit of women veterans and female military spouses, and follow-on mentoring through a community of partners.
This isn’t exactly easy business loans for women. Still, it can be a decent partner to new small business loans for women.
Funding for Women Owned Businesses: Amber Grants
$1,000 to a different women-owned business each month. At the end of the year, one of the monthly grant winners gets $10,000 more. See: https://ambergrantsforwomen.com/get-an-amber-grant/
These are terrific grants and loans for women who want to start a business.
Funding for Women Owned Businesses: Alternative Lenders
If you have decent personal credit and tax returns for 2 years that show a profit, alternative lenders have programs that could work. You could be approved with rates of 7% or lower. Lenders will need to see profit on your tax returns.
It’s another great way to get loans for women in business. But they aren’t always low interest business loans for women, particularly if you have bad credit.
There’s also business credit building!
Funding for Women Owned Businesses: Small Business Credit Building
Sometimes you just can’t get small business loans for women with bad credit. Or loans for women to start a small business.
This is when it pays to build business credit. Business credit will cost you far less than most business loans for women with bad credit.
Business credit is credit in a company’s name. It doesn’t attach to an entrepreneur’s consumer credit, not even if the owner is a sole proprietor and the only employee of the company.
Accordingly, a business owner’s business and personal credit scores can be very different. Therefore, it’s easier to build business credit than get start up business loans for women with bad credit.
Considering that company credit is distinct from individual, it helps to secure a business owner’s personal assets, in the event of court action or business insolvency.
Also, with two distinct credit scores, an entrepreneur can get two different cards from the same merchant. This effectively doubles purchasing power.
Another benefit is that even startup companies can do this. Heading to a bank for a business loan can be a recipe for frustration. But building business credit, when done properly, is a plan for success.
Individual credit scores rely on payments but also various other considerations like credit usage percentages.
But for small business credit, the scores actually merely hinge on if a company pays its bills promptly. It is a terrific source of funding for women owned businesses.
Growing small business credit is a process, and it does not occur automatically. A business has to proactively work to establish company credit.
Nonetheless, it can be done easily and quickly, and it is much speedier than developing individual credit scores.
Vendors are a big aspect of this process.
Carrying out the steps out of order will cause repetitive rejections. Nobody can start at the top with small business credit.
So, even if you’re hunting for business loans for women to start a business, it makes sense to set up for what we call Fundability™.
A small business needs to be Fundable to lenders and merchants.
Hence, a company will need a professional-looking website and email address. And it needs to have website hosting from a merchant like GoDaddy.
And also, business telephone numbers need to have a listing on 411.com.
Also, the company phone number should be toll-free (800 exchange or similar).
A business will also need a bank account devoted solely to it, and it must have every one of the licenses essential for running.
These licenses all must be in the correct, appropriate name of the company. And they must have the same small business address and telephone numbers.
So, keep in mind, that this means not just state licenses, but potentially also city licenses.
And keep in mind, this is good practice for getting start up business loans for women. Many new business loans for women want you to be legit.
Dealing with the IRS
Visit the IRS website and get an EIN for the small business. They’re free. Pick a business entity like corporation, LLC, etc.
A business can start off as a sole proprietor. But they should change to a form of corporation or an LLC.
This is in order to decrease risk. And it will make best use of tax benefits.
A business entity will matter when it involves tax obligations and liability in case of a lawsuit. A sole proprietorship means the owner is it when it comes to liability and taxes. No one else is responsible.
Sole Proprietors Take Note
If you operate a business as a sole proprietor, then at least be sure to file for a DBA. This is ‘doing business as’ status.
If you do not, then your personal name is the same as the company name. Because of this, you can wind up being directly accountable for all small business financial obligations.
But don’t consider a DBA filing to be anything more than a mere steppingstone to incorporating.
Kicking Off the Business Credit Reporting Process
Start at the D&B website and get a free D-U-N-S number. A D-U-N-S number is how D&B gets a business into their system, to produce a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.
Once in D&B’s system, search Equifax and Experian’s sites for the company. You can do this at www.creditsuite.com/reports. If there is a record with them, check it for correctness and completeness. If there are no records with them, go to the next step in the process.
This way, Experian and Equifax will have activity to report on.
First you must build trade lines that report. This is also called vendor credit. Then you’ll have an established credit profile, and you’ll get a business credit score.
And with an established business credit profile and score you can start to get more credit.
These kinds of accounts often tend to be for the things bought all the time, like marketing materials, ink and toner, and office furniture.
But first off, what is trade credit? These trade lines are credit issuers who will give you starter credit when you have none now. Terms are in most cases Net 30, instead of revolving.
So, if you get approval for $1,000 in vendor credit and use all of it, you need to pay that money back in a set term, like within 30 days on a Net 30 account.
Net 30 accounts must be paid in full within 30 days. 60 accounts need to be paid fully within 60 days. In contrast to with revolving accounts, you have a set time when you have to pay back what you borrowed or the credit you made use of.
To launch your business credit profile properly, you ought to get approval for vendor accounts that report to the business credit reporting agencies. Once that’s done, you can then use the credit.
Then repay what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.
Vendor Credit – It Helps
Not every vendor can help in the same way true starter credit can. These are merchants that will grant an approval with minimal effort. You also want them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.
Here are some stellar choices from us: https://www.creditsuite.com/blog/5-vendor-accounts-that-build-your-business-credit/
Monitor Your Business Credit
Know what is happening with your credit. Make sure it is being reported and deal with any inaccuracies as soon as possible. Get in the habit of taking a look at credit reports. Dig into the details, not just the scores.
Update Your Data
Update the information if there are inaccuracies or the info is incomplete.
Fix Your Business Credit
So, what’s all this monitoring for? It’s to contest any mistakes in your records. Mistakes in your credit report(s) can be fixed.
Disputing credit report errors commonly means you precisely detail any charges you contest.
A Word about Building Business Credit
Always use credit smartly! Never borrow beyond what you can pay off. Keep track of balances and deadlines for payments. Paying off on time and fully will do more to boost business credit scores than pretty much anything else.
Growing company credit pays. Excellent business credit scores help a small business get loans. Your lending institution knows the company can pay its financial obligations. They know the business is for real.
The small business’s EIN connects to high scores and lenders won’t feel the need to call for a personal guarantee.
Funding for Women Owned Businesses: Takeaways
Get creative and grab the best funding for women owned businesses around! The best small business loans for women are there for the taking.