When women begin planning how to start businesses, they often do so with the full realization they are at a statistical disadvantage in some ways compared to male entrepreneurs. However, there are also some perks related to being a female business owner. Many of them are related to alternative financing that’s open to women who need money to get their businesses off the ground, but either do not want to or cannot rely on traditional funding.
Small Business Administration Loans
The Small Business Administration (SMA) has several loan programs specifically for women. Refreshingly, the qualifications for receiving funding aren’t very strict. As long as your business has a good credit report and you have a plan the lender feels will be successful, there’s a good chance you’ll get the financial resources you seek. However, keep in mind this method of alternative financing can be time consuming, so it’s not a quick answer to your monetary shortcomings.
Grants for Women-Owned Companies
There are numerous opportunities for women to apply for business-related grants. Although research will be required to find appropriate choices and you’ll need to carefully fill out the necessary paperwork, a grant could really help your company get off the ground. In turn, you could be an inspiration to other business-minded women.
A Business Line of Credit
If you opt to apply for a business line of credit and get approved, you’ll have capital to access on a continual basis, without having to perpetually apply for separate loans every time you need more money. For example, with this type of alternative financing, you might qualify for a $25,000 business line of credit and be able to take from that amount over the course of several years or months as your spending habits change. Rather than getting all $25,000 at once, you can take out $5,000 one month, $10,000 five months later, and so on.
This option works the same way as a credit card, and although it’s not only available to females, women often use it. As you repay the amounts you’ve withdrawn, the total amount of credit goes up. However, if you have a low credit score, you might have to pay higher-than-desirable interest rates.
These are just a few of the alternative financing possibilities that are available to women who want to start their own businesses, but would rather not use traditional resources for funding. Be sure to keep them in mind if a lack of money is posing an obstacle.