During the past 20 years, women-owned businesses have grown by leaps and bounds, accounting for nearly four-in-10 of the firms in the U.S. There were an estimated 11.6 million women-owned businesses in the U.S. in January 2017, according to the 2017 State of Women-Owned Businesses Report commissioned by American Express. Additionally, their businesses generated more than $1.7 trillion.
Despite these statistics, women still have a more difficult time getting approved for loans than their fellow male entrepreneurs. It is not easy to explain why funding access is unequal. But, what women can do is research and focus on business loans for women entrepreneurs via alternative lenders.
Try Alternative Lending
To fill in the gap made by more traditional lending institutions, women need to embrace alternative lending opportunities. Women already have success with alternative funding, technology-based platforms, like crowdfunding. So, there is a good chance they will have success with online lending, as well.
Try one of these lending options:
- Peer-to-peer loans: These loans are facilitated through on online lending platform in which borrowers are matched with investors. After a borrower completes an application and receives an offer of credit, investors have opportunities to invest in the loan.
- Short-term business loans: If you need immediate or emergency financing, this type of loan can help you get by during periods of low cash flow. You can pay for operating expenses or an unexpected expense.
- Working capital loan: If you are not looking to buy long-term assets or investments, a working capital loan is a good option. A working capital loan allows you to pay for daily operation expenses, such as wages and accounts payable. Merchants with cyclical sales cycles or businesses with high seasonality depend most on this type of financing.
Ways to Use Business Loans for Women
In addition to establishing and maintaining your business, you can use loans for:
- Training or Hiring Staff: As your business begins to take off, you need help. A loan gives you the capital you need hire new employees or train existing employees in areas that your business could see the most benefits.
- Buy New Equipment or Update Existing Equipment: Keep your business running efficiently with a business loan for equipment. Whether you need to update your computer system or buy new office furniture, a loan will help you offset these types of major purchases.
- Update Your Marketing Strategy or Start a New Campaign: Getting people thinking and talking about your business is vital to its success. Using a loan to launch a new campaign via online tools or more traditional marketing methods is money well spent.
- Buy More Products: Maybe the Christmas season is when your business really shines. This is the time to buy your most popular items in bulk in preparation of the busy shopping season. A small loan gives you the cash you need to buy extra products that likely will result in a real return on your investment.
- Add Locations: When a business is thriving and you have an opportunity to add locations, it’s important to do so. If you don’t have the capital to make it on your own, borrow it. In the long run, having more than one site, increase revenues dramatically.
A Last Thought On Business Loans for Women
As the number of women entrepreneurs grows, they need to have access to financing so that they can maintain and grow their businesses. Alternative funding is a good way to access capital.
When it’s time for you to make a decision, consider First American Merchant (FAM). As a high-risk merchant expert, FAM works with businesses of all sizes and backgrounds to find the right business funding solutions. Its online application process is quick and simple.