As of 2012, there are almost 10 million women who own a business in the USA. That’s a 26.8% increase since 2007. If you are a woman that owns a small business, there are numerous lending options out there for you. Beyond the use of personal savings, credit cards, friends, family, and retirement accounts, there are many ways to get the capital that you require.
The SBA does not fund loans directly, but rather they guarantee the loans with a network of lenders. You will have to show you have the means to back the loan, so be ready to provide your personal and business financial records. Remember, your credit score is also a factor, so if it needs improvement, try doing this before your appointment.
Your local SBA office can help you decide which additional funding options might be open to you.
#1 Venture capital/angel investors
If you’ve ever watched ABC’s Shark Tank, then you are aware of who angel investors are – affluent individuals providing capital for business start-ups, usually in exchange for convertible debt or ownership equity. In real life, there is no need to meet with famous venture capitalists or appear on TV to get a deal that will help you expand and/or grow your business.
One known angel group is Golden Seeds. What’s really neat here is that it’s a prerequisite for the woman to be on their board before investing. There are two things that Golden Seeds cares about: does she own a large amount of the company’s equity, given her role in the company when she joined, and does she have power/influence in the company?
Before you approach angel investors, do your homework. Know your value and your numbers. Be ready to answer questions about projections, sales, profit and loss, and how you are going to use the money.
You are best to search for investors who have approved other companies in your niche industry as most like to invest in what they are familiar with. This way you can narrow down the list of people you want to pitch to.
Grants are in high demand because they do not need to be paid back. And just because grants have limited availability does not mean you should not pursue what’s out there. The SBA and other organizations provide numerous grants for women who own a business:
Eileen Fisher Women-Owned Business Grant Program
Eileen Fisher Program is a private organization that awards 5 grants per year to businesses that are 100%-owned by women with founding principles of sustainability, innovation, and social consciousness.
The Amber Grant
The Amber Grant was founded in 1998 to honor a young woman who passed away before she was able to accomplish her entrepreneurial dreams. The grants range from $500 to $2,500 to assist micro-entrepreneurs in getting their business started so they can later go after larger investments.
InnovateHER: Innovating for Women Business Challenge
InnovateHER is SBA-sponsored. This program awards three businesses that can impact the lives of women. The grant sum is $30,000.
There are also grants available from special interest groups that you could qualify for. Make sure that you check for grants at the state level as well.
If you can’t qualify for traditional financing, microloans could be the answer for you. These are low-value loans, usually $100 or less. These are ideal for micro enterprises that just need a little bit of a hand to get their idea off the ground. If necessary, you can get multiple microloans at once.
It’s pretty common for all of these options to be a tad bit overwhelming. Whether you are starting your dream venture, or you need capital to keep your dream alive, you can get the financing you need. Women-owned businesses have an impressive economic impact, generating nearly $1.5 trillion in revenue and employing over 7.9 million people. Without small business lending, it couldn’t be done, so go ahead and find the right venue for you!