Women in Business: Taking Advantage of Loans and other Business Programs for Women
July 6, 2022 | Last Updated on: February 1, 2023
July 6, 2022 | Last Updated on: February 1, 2023
As the United States looks at encouraging the involvement of women in business, a number of different programs and opportunities have been popping up to support women in their business endeavors. These programs are part of a larger effort by the federal government to promote women through education and career support systems. These programs continue to yield results. In fact, according to the National Association of Women Business Owners, 39% of privately held firms are owned by women, meaning a woman owns 51% of the business or more. This is a total of more than 11.6 million firms.
In this post, we’ll take a look at the different programs that have been instituted and discuss how you, as a current or prospective small business owner, can take advantage of them.
It is important to note that to qualify for most of the programs that are specifically for women, a woman must own 51% or more of the business.
While there are no loans that are only open to women, SBA loans offer a great opportunity for women. As a government agency that has shown its commitment to the success of women, along with small businesses in general, they offer a great opportunity.
There are a number of SBA loan options, including their SBA 7(a) loan program, which is their most popular. The SBA 7 (a) loan program allows businesses to access up to $5 million in funding, with terms as long as 25 years. These loans feature favorable terms, with typically lower interest rates on account of the government backing. Typical reasons for taking out this loan include working capital, equipment purchases, and even refinancing current business debt.
The SBA Microloan is another popular option. These loans are typically easier to qualify for, as they are for smaller amounts ranging from $500 to $50,000. They are great for working capital, equipment purchases, and any other business endeavors that don’t require a great deal of funds.
Finally, another option for small businesses to consider is a line of credit. These can be extremely beneficial if your business ever runs into a situation where it needs access to funding or working capital quickly since you’ll already be approved for a loan through the line of credit.
However, if you are looking to apply for an SBA loan, bear in mind that the process may take slightly longer than with other lenders as the SBA and the regular lending institution will be involved in the approval process.
SBA loans are not actually funded by the SBA or the government. Instead, they are provided by regular institutions, but they are guaranteed by the SBA, meaning if you default the government will pay off a portion of the loan. These guarantees can range from 50% to 85% and they allow lenders to loan with greater confidence to small businesses that would otherwise be considered a risk.
The U.S. Small Business Administration’s Office of Women’s Business Ownership was established in 1979. Programs that are offered by them include business training, business counseling, and an assortment of other business-oriented services.
The federal government’s goal is to award at least five percent of all federal contracting dollars to women-owned small businesses each year.
These contracts tend to be in areas and business sectors where women are underrepresented and provide incentive to curb the trend. If you are looking to start a small business, consider looking into which sectors are included in this list as you might be able to take advantage of this unique opportunity. The Small Business Administration (SBA) keeps a running list of these industries on its website for the benefit of small businesses looking to take advantage of the program.
Be sure to take a look to see if your business provides products or services within one of the industries.
Score is a 501(c)(3) non-profit organization that is supported by the SBA and whose goal is to assistance, education, and mentorship to small businesses throughout the U.S. While their entire organization isn’t solely focused on women-owned businesses, they are dedicated to helping these businesses succeed. These resources include informational articles and webinars that provide learning resources for small business owners, some of which are geared toward women specifically.
For a list of upcoming events offered by both the Small Business Administration and institutions that support it, be sure to take a look at their events calendar. You can refine your search by industry, topic, and your district office.
As always, before signing any agreements or contracts, be sure to spend the proper amount of time looking into the details and commitments to make sure that they make sense for your business. Just because some of these options are specifically geared toward women does not mean they are necessarily better for your particular business than the many other options out there that are not specifically limited to businesses owned by women.
Many programs that are offered to support and stimulate women-owned businesses throughout the United States are run at the local and state level, and they change frequently. As such, you should be sure to keep tabs on what programs your state and local governments are running at any given time to ensure you are taking advantage of all the opportunities available to you.
You can usually keep tabs on these sorts of programs by checking in on your local Chamber of Commerce webpage and doing a little bit of research each time you go to take out a loan. You never know what sort of program you might find. Plus, there are often programs that even if not specific for women-owned businesses can still provide much-needed support to your small business.
At Biz2Credit, we make it easy for business owners of all backgrounds to access funding, and we pride ourselves on making these funding opportunities widely available to all small business owners. This importantly includes traditionally underrepresented groups, like women and minorities. Every day, we provide funding to small business owners across the nation.
For more information on this and other topics related to small businesses in the United States, be sure to keep checking back here at our Biz2Credit Blog. We are always posting new content for our readers.