Businesses owned by women have grown exponentially in the last few decades. According to statistics from American Express, women entrepreneurs and business owners account for 12.3 million companies throughout the United States. Yet, a recent CNBC report states that women entrepreneurs get nearly 50% less funding than their male counterparts. This shows that getting funding for small businesses is still a challenge for women. However, there are several financing options available in the form of start-up loans that women can avail.
How to Apply for Women Entrepreneurs’ Start-Up Loans
Applying for a start-up loan is not an easy task. But with a number of online lenders providing these start-up loans, the process is now much easier. You can apply for these loans either by submitting an application in person or through an online platform. You’re required to provide specific information about your business, the amount you need, and the reason for taking the loan. The lender then reviews your application, verifies the information and determines your approval. You can use the funds from these loans as working capital, for purchasing equipment, or to expand your business.
How to qualify for these start-up loans?
Every lender offering start-up loans for women entrepreneurs has different requirements for qualification. However, most of them look for the following basic criteria:
- Credit score- Lenders are concerned about the financial health of your business. So, one of the most important things the lender will look at is your business’s credit score. If your business is new, or not established enough to have a credit history, lenders take your personal credit score into account.
- Assets and liabilities- Lenders pay attention to the assets of your business, any debts that are yet to be paid, unpaid credit card balances etc. All of these can impact your loan application.
- Minimum time in operation- Most lenders require that your business has been in operation for at least six months.
- Legal business structure- Whether your business is an LLC, C-Corp, or S-Corp may impact the loan application. Lenders review the legal structure of your business to make sure it is in line with their lending guidelines.
- Reason for borrowing- In order to qualify, lenders require you to specify the reason for the financing, and how you intend you use these funds.
Most lenders typically provide start-up loans that cater to the broader scope of business owners. There are only some lenders such as KeyBank and Women’s Economic Ventures who specifically provide start-up loans for women entrepreneurs. But the good news is that you are eligible for start-up loans from any lender as long as you meet all the eligibility criteria. All you need is an accurate, well-organized account of your financials and fairly good credit to set off on your long-awaited entrepreneurial journey.