Women play an integral part in the economy. Nowadays, there are many businesses that are owned by women. In order for their businesses to expand and to give incentives for startups and entrepreneurs who want to venture and have their own kind of business, it is very essential to have the available funding. Luckily, business loans for women are not difficult to find. There are many options available depending on the criteria along with financial needs.
- Traditional Loans
There will always be traditional loans that are available for women. If you go to the bank, you can easily apply for a loan, especially if you meet the requirements and you have a good credit standing. Although most banks do not have a specific kind of loan package for women, there are certain banks or lending firms that offer business loans for women.If you can get a bank term loan, this would be a really good option, especially if you need a big amount of funding. However, it is also very important to know that the rejection rate for small business applicants from this banks is also quite high. But if you are able to meet the requirements and you are eligible to apply, you can definitely use this kind of loan to buy real estate, or for your long-term plan for business expansion.
- SBA Loans
Another way to finance a business is to get an SBA loan. Also known as Small Business Administration loan, this type of loan is backed by the federal agency which makes it a more affordable option as it offers flexible terms and the interest rates are low.How to get an SBA loan?
To get an SBA loan, you need to satisfy everything that is on the loan application checklist. Some of the documents that you have to prepare and submit include the following:
- Information Form
- Personal financial statement
- Statement of personal history
- Personal income tax returns and business tax returns
- Business lease
- Business certificate/license
Once you have all of the documents that you need, you can then ask for the names of approved lenders. You can actually make use of a lender match tool that match your financial borrowing needs. Banks have to follow the SBA guidelines. However, they have their respective underwriting criteria.
- Online Loans
Nowadays, many borrowers prefer to access online loans simply because they are very convenient. Less hassle and fast to process, online lending companies make it a whole lot easier for business owners to have access to funds in just a short period of time. In just a matter of hours or days, your loan application can already be approved. The only downside is that online lending companies tend to charge much higher than others.This type of loan is much suitable for people who don’t have too many options. Online lending companies are not as strict compared to traditional banks and other lending firms. But in getting an online loan, you have to be aware of the cost of getting one.
- Business Line of Credit
For women who want to get a loan where they can enjoy flexibility when it comes to how they are going to use the funds, business line of credit is the best choice. This is suitable especially for those who are in the retail or food business where flexibility is essential. So, how is this different from other types of loan?With business line of credit, you are given access to a certain amount, but you cannot use all. When you start your payment, you only pay the interest on the amount that you use. When you have paid it back, your credit line goes back to the original amount. Getting a business line of credit does not have to be too difficult. Then again, it depends on the specific requirements of the lender.
- Microloans for Women
To jumpstart a business, there are cases where you only need a small amount. In this case, getting a microloan is the best option. There are various organizations that offer microloans. This is the perfect choice for those who are running sole proprietorships as well as home businesses. With the amount that you can get from a microloan, you can start your own business and eventually expand. The only downside of a microloan is that if you are in need of a big amount of money, you may have to go for another type of loan.
- Small Business Grants
There are small business grants that are specifically created to help women entrepreneurs. With business grants, you can have an affordable option. In deciding to apply for a small business grant, expect the fierce competition. Keep in mind that there are also many other entrepreneurs who are in need of funding. There are also cases where organizations prioritize certain types of businesses or industries. Prior to applying for a grant, take the time to know exactly the requirements and other documentation needed so you know if you will fit the criteria.
Which Loan Option to Choose
Women have various options to choose from. If you are planning to set up your own business or to even further boost your capital, you won’t have any difficulty finding the specific funding that you need. The only thing that is that you have to weigh your options. It is also important to note that every lending company varies when it comes to specific requirements. You may want to avail a certain type of loan package but if you don’t qualify for it then you won’t get approved.
Do your own research and have as many options as you can. From there, you can narrow down your choices and choose the best loan that you can use for your business.