4 Small Business Lending Options for Women

As of 2012, there are nearly 10 million women-owned businesses in the United States. Since 2007, that's a 26.8% increase. If you're one of those businesses, there are some small business lending options out there just for you. Beyond using credit cards, personal savings, retirement accounts, and reaching out to friends and family, there are many ways to get the capital you need to run your business.

Grants

Grants are highly sought after because they're not required to be repaid. Just because grants have limited availability doesn't mean you shouldn't consider them. The Small Business Administration (SBA) and other organizations provide a number of grants specifically to women-owned businesses including:

  • The Amber Grant: Founded in 1998, this program was created to honor a young woman who passed away before accomplishing her entrepreneurial dreams. The small grants, ranging from $500 to $2,500 help micro-entrepreneurs get their start in business so they can go after larger investments later.
  • Eileen Fisher Women-Owned Business Grant Program: This private organization awards five grants per year, to 100% women-owned businesses with founding principles of innovation, sustainability, and social consciousness.
  • InnovateHER: Innovating for Women Business Challenge: Sponsored by the SBA, this program awards three businesses that impact the lives of women $30,000 to further their growth.

Outside of these, there are grants available from special interest groups that you may qualify for. Also, don't forget to check for grants available at the state level, too.

Angel Investors/Venture Capital

If you've ever seen an episode of ABC's Shark Tank, then you know what angel investors are. You don't have to meet with famous venture capitalists and appear on national TV to land a deal to expand or grow your business, though.

GoldenSeeds is one such Angel group. Here's the cool part, though. They require a woman to be on the board as a prerequisite before investing. "Golden Seeds cares about two things: Does she have power and influence in the company? Does she own a "fair" amount of the company's equity, given her role and the stage of the company when she joined?" Bravo Golden Seeds.

Before you approach angel investors, make sure you've done your homework. Know your value proposition, and your numbers. Be prepared to answer questions about sales, projections, profit and loss, and have a plan for how you're going to use the money.

Outside of these, there are grants available from special interest groups that you may qualify for. Also, don't forget to check for grants available at the state level, too.

You'll be better off searching for investors who've invested in other companies in your industry as most will only invest in what they know. This may mean spending time narrowing down the people you want to pitch, but the more targeted, the better.

Small Business Loans

If you don't manage to get a grant or an investment from an angel, there's always small business loans. The SBA doesn't directly fund the loans, but instead guarantees them with a network of lenders. You'll have to prove you can afford to pay back the loan, so be prepared to show personal and business financial records. Your credit score will also be a factor, so if it could use some improvement, try to bring it up before applying.

Your local SBA office can help you determine what additional funding options are available to you as a woman-owned business.

Microloans

If you don't qualify for traditional financing, microloans could be the answer. These loans are small in value, with the majority being $100 or less. These are ideal for micro-enterprises that just need a leg up to get their ground. You could get multiple microloans at once, if necessary, to help you accomplish your goals.

It's natural to find all of the options overwhelming. If you need help deciding which choices are best for you, check out these tips for getting a business loan. No matter whether you're starting your dream venture, or you're needing cash flow to keep the dream running through growing pains, you can get the financing you need. Women-owned businesses have an amazing economic impact, generating close to $1.5 trillion in revenue and employing more than 7.9 million people. It couldn't be done without small business lending, so go on and grab a piece of the pie.