With scores of women launching their businesses productively, entrepreneurship is no more a man’s realm. At present, more than 9 million U.S. firms are owned by women, signifying a sharp rise in the number of women- owned businesses. However, only a smaller percent of total small business loans are given to female-owned businesses. Unable to secure business financing from banks and credit unions despite being financially well secure, many women entrepreneurs are facing up couple of challenges that are unusual to their male counterparts. Outlined below are few tips for women entrepreneurs to beat key challenges and discover greater success when looking for small business financing.
Join business networking groups – Being a part of business networking group has several rewards. It is not only fun but also allows exchange of countless ideas and opportunities with regards to small business funding. When you associate with other female enterprisers, you can get to know what they have pursued to secure working capital for their businesses.
Stop using personal credit; improve business credit profile – Getting a loan from traditional lenders is notoriously an unmanageable task, irrespective of gender. It is an observed fact that women are disposed to use their personal credit more habitually than men do. This tendency puts the former at a greater disadvantage, particularly when applying for small business financing, given the truth that banks consider a strong business credit for approving loan. Therefore, using business credit whenever possible can perk up your business credit profile and thus boost your loan approval chances. Alternatively, request your business suppliers to extend credit so that you can begin constructing a substantial business credit profile.
Review your business credit profile – Be thoughtful of your business credit profile before you think of applying for a business loan. Check for the accuracy of it, as any slip-up on your profile can influence your ability to get business loan. Like you, many women business owners are uninformed of how business report looks like, how it is reported and what are the key credit-reporting bureaus available.
Look beyond the conventional lending options – For many female business owners, bank was the only place to look at in need of financing for small businesses. However, being influenced by several factors, this trend has shifted. Small businesses have realized that it is tough to qualify for business funding, given the bank’s strict loan requirements such as superb business profile, excellent personal credit score, larger fund requirements are acceptable, and lastly you must have been in business for a reasonably longer time. However, with the emergence of direct lenders online, it has become convenient for female entrepreneurs to access funding without any unrealistic requirements. Additionally, the funding process is devoid of collateral and bad credit is also welcome.