Tips for helping women get small business loans
There are multiple obstacles that one faces while starting a small business, especially, in terms of finance. Small business loan providers for women have made it easier for women to own and run multiple small businesses. If you are seeking information about small business loans for women, read along to find out all about the same.
Which are the top loan providers that offer small business loans for women?
- The US Small Business Administration (SBA) Microloan Program– There are multiple non-profit lenders that have partnered with the SBA. These lenders offer loans up to $50,000. It is a great option for small business loans for women running startups or small businesses.
- Accion USA– Accion USA is the domestic arm of the global nonprofit organization, Accion. They have the largest network for small business loans in the country. With offices in around 30 cities across the country and having provided nearly 50,000 loans, this loan provider is ideal for women seeking small business loans.
- TrustLeaf– TrustLeaf is a small business loan provider that seeks its financing from crowdsourcing through friends and family of the applicant. Business owners, using TrustLeaf as the medium, set up a campaign with their business plan and loan requirement seeking help from their near and dear ones.
Which companies offer small business loans for women with bad credit?
- Kabbage, Inc.– Kabbage, Inc. is one of the few money lenders that do not have a minimum credit score requirement to offer small business loans for women. The company offers a line-of-credit loan of up to $250,000. They weigh accounting, data of online sales, and banking more than the personal credit score of the business owner.
- Fundbox– Another loan provider that does not require you to have a good credit score; however, your business must be at least three months old and have an annual revenue of $50,000 to qualify for the loan. The loan processing is less expensive than what Kabbage, Inc. offers you, but you might also get the loan within a day.
- OnDeck– While the first two do not consider the credit score, OnDeck requires you to have a score of at least 500. The lower your score the higher will be the interest rate with this small business loan provider. They also process loans within 24 hours for eligible candidates.
Which are the different types of small business loans for women?
- Line-of-credit loans– This type of loans is most beneficial to small business owners. The line-of-credit loans can only to be used for purchasing inventory and meeting operational costs for smooth business cycles. This is a short-term loan taken in a bid to cover the checks and primary business expenses.
- Balloon loans– These loans are slightly different from amortized loans offered by banks. The loan is written in another name and only the interest on the loan is paid in the term months. The repayment of the loan is in form of a “balloon” payment on expiry of the term months.
- Installment loans– One of the simplest types of loans, these loans are repaid with fixed monthly payments that include the interest as well as the principal amount. You will receive the entire amount when the contract is signed. Interest for this type is usually calculated on the tenure of the loan.
How to efficiently use loans in a small business by women?
- Banks are not the only option for getting a small business loan for women. Apart from banks, one can always look at credit unions, online lenders, and other sources. If you have a bad credit score, this might be a good option for you.
- Small businesses are generally owned by new entrants in the business world, and it is common for early-stage entrepreneurs to use personal credit for their business. However, you must avoid doing this. Maintain separate personal and business accounts and only use the initial personal amount invested by you (if any).
- The best way to use the loan amount correctly is to set payment terms with your suppliers. Payment terms include setting a fixed date for the payment of supplies purchased. This will not only help you use your loan money efficiently but also allow you to start paying it off from the reaps of your business.