Women are starting and growing their small businesses at record-breaking highs. 40% of new businesses in the US are owned by women, and the number of businesses women are launching is growing at double the rate of male-owned businesses.
But funding isn’t keeping up with the growth of women-owned businesses. And, while there are government and community support for female entrepreneurs, a lot of the traditional funding sources require perfect credit to qualify. Unsurprisingly, statistics show that 1 in 4 female entrepreneurs apply for business loans, and typically ask for 35% less in funding than male business owners do.
Why aren’t women applying for funding? According to a survey by the National Association of Women Business Owners, nearly 25% of female business owners don’t bother to apply for traditional business loans because they don’t think will approved – and not without reason: women-owned companies are 15-20% less likely to get a loan than male-owned businesses.
Bad Credit Business Loans
Convincing a bank to extend a loan to your small business has never been easy, no matter whether you are a man or a woman. Banks don’t like risks, and they like to make money. Small businesses are a risk, because they don’t have the same bail-out options as a big business does. And small businesses tend to ask for small loans, when compared to the amounts big businesses borrow. Since the amount of work associated with lending funds is the same no matter what amount is borrowed, banks would prefer to lend huge amounts to big businesses. It’s easier, it’s safer, and it’s profitable.
A female entrepreneur stull might be able to get a loan based on personal credit ratings, collateral available to secure the loan, business history and anticipated performance and other factors. But if your credit rating isn’t in the 700+ zone – you’re not going to get a bank loan (and that especially includes Small Business Administration backed loans). But you still have options.
Working Capital Help for Women-Owned Businesses
If your personal credit is low (under 600), you have to find other ways to convince funders to take a risk and loan you money. A solid business plan helps, and so does networking. You should also apply for a DUNS number, so that you can establish a business credit history and access your business credit report from Dun & Bradstreet. Plus, once you have a DUNS number, you can apply for small business grants listed on Grants.gov, a database of federally sponsored grants. When you have your DUNs, you can register to do business with the U.S. government through its System Award Management website, and then create an account at Grants.gov.
Options such as Women-Owned Small Businesses (WOSB) Federal Contracting program can provide help in accessing work from the federal government, if you meet the pre-qualification requirements. The Small Business Administration offers workshops and networking events that can educate you on business best practices and open the doors to new opportunities. The National Women’s Business Council, a non-partisan federal advisory council, also holds in-person and online networking events. Google for other networking and training opportunities near you.
You can meet with business mentors at a local SBA resource center if you need help understanding funding options and how to prepare your application package for a bank loan.
The Fastest Way to Get Bad Credit Business Funding
Alternative funders are happy to work with businesses that have been open for three months or more and have revenues as low as $5000 a month, and funds are typically available within 72 hours. Business owners don’t need to have perfect credit scores to qualify for funding.
One easy way to get started with alternative lenders is by getting pre-approved by One Park Financial, which then gives you access to a funding expert who can discuss your business needs and options to determine what funding types best meet your needs.
One Park Financial works to help owners of small and mid-sized women-owned businesses access the funding that meets their needs. Established in 2010 and founded by entrepreneurs, One Park Financial understands the challenges associated with small business loans. Visit oneparkfinancial.com or call 855.218.8819 and connect with a funding expert today to discover the options that make sense for you and your business.