It is misleadingly believed, that requests of business loans for women are turned down.
‘The reason is that banks and other financial institutions do not take them seriously due to their Gender. As a result of which they lag behind in building businesses on their own.’
This assumption is obviously not true. Many loan requests by women business owners are rejected because of their lack of ability to plan. While acquiring a business loan, gender does not matter. What matters is the time you have spent in preparing the loan proposal and how thorough you have been in it.
According to the National Women’s Business Council (NWBC),
“There were 7.8 million businesses owned by women in America in 2007. Of these, about 11.7% employ full-time workers, generating average annual receipts of over $1 million. The total revenue generated by all the women-owned businesses across the country (not considering farm-based business) has increased to $1.2 trillion. Women-owned businesses make up about 52% of all the businesses in the social and healthcare assistance arena.”
So can Women Acquire Loans Easily?
The answer is ‘yes’. It is rather easier for women to acquire loan and finances for their small businesses as compared to their male counterparts. A problem usually occurs in the application process as lenders ask for documents required in applying which are often not prepared.
Mistakes Women Make
Women make extremely basic mistakes while choosing the right funding company and also while choosing the suitable loan program for their small business.
• Choosing The Wrong Companies for Loan
Instead of researching and finding the most suitable loan providing institutions most women depend entirely on what their friends suggest. They are often misguided, due to which they lose most of their money in repaying large interests rates ending up in debt.
• Vague Business Plan and Loan Proposal
While planning to enter the next phase of your business you cannot just move forward without a plan. If you have a plan in mind then you need to write it down so that it can be evaluated by professionals.
With that comes a loan proposal which reports about you and your business, your future business plan, your financial requirements, how much money you require, how and where will you use it. How you intend to pay back the loan, and what your plans are if you are unable to pay it back.
• Lender’s Application
This is the application of trust between you and the money lending institution. Even if you have a bad credit history, specify only the truth in your lender’s application. Omitting details may be extremely unprofessional on your part.
• Financial Statements
Be ready with your two years of tax records and two years of Business and personal bank statements when applying for a small business loan. Though you may not require them immediately but eventually, yes you will need them. If you don’t have an established business already, then your personal tax record and personal bank statement will help you in creating a trust with your lender as being a reliable and responsible individual.
What should be done?
Not every loan gets approved. But assuming that women loans are often rejected is a farce, we need to dig deeper into the reasons instead of finalizing a hypothesis. In case your loan application is rejected, then you need to find other sources of funding and prepare a better case for yourself.
The Federal government does not provide grants for women to start or expand a small business. But the story does not end here. There are plenty of places where women can acquire loans for their small business all they require is research. Merchant companies are one such source which can provide women with the funding they require within 72 hours time.
Business cash advance companies have customized plans especially for women entrepreneurs. Not only this, they also assist women business owners in entire process and guide them through.
Merchant companies help women entrepreneurs in owning and operating small business without the hassle of high-interest loans or other cash advance options. They provide financial securities at affordable rate. Such companies do not stop any payments on bad credit histories. Instead, they evaluate your position from time to time and make your repayments flexible.
A large percentage of jobs have been created by women small business owners whose business requirements are often not taken seriously. The government should pay special attention to women business owners as they are a valuable asset for American economy.