You’re a creative go-getter with a great business idea, a plan to get it rolling, and the energy to sustain it through the best and worst of times. Great! Economic indicators are showing that now is the time to get started on bringing your business dreams to fruition. “Women’s entrepreneurial appetites are at an all-time high,” explained Carla Harris, chair of the National Women’s Business Council (NWBC), a nonpartisan federal advisory council, during a workshop speech at the 2015 Lead On Conference for Women
Information released by NWBC shows that women-owned firms have an economic impact of $3 trillion that helps create and/or maintain 23 million jobs, 16 percent of all U.S. jobs. “But women continue to face challenges accessing capital and other obstacles to growth” Harris said.
Additional research further supports the financial obstacles many would-be female business owners face. In fact, a policy report issued by the Kauffman Foundation states that when it comes to funding, women on average start their businesses with half as much capital as men. They also have only a 30 percent chance of attracting angel and venture capital funding.
Never mind the disheartening statistics. The good news is that as a female entrepreneur you do have options. Some traditional banks, such as PNC Bank, have specialized lending programs for women while non-traditional enterprises, such as Lendio and MoolaHoop, offer small business owners a more flexible approach to funding. Whether you choose to go the traditional or non-traditional route, there are a few things to keep in mind:
Don’t be afraid to ask lots of questions and always take advantage of supplementary services. For instance, in addition to providing access to funds, Lendio does much of the leg work for you by providing a pre-vetted list of non-traditional lending options, such as peer-to-peer, which pairs you with a private lender. Lendio also focuses on recommending SBA Microloans that offer small loans (Maximum of $US 50,000) to new businesses by pairing you up with non-profit organizations that offer government funding to entrepreneurs in specific counties. Better still, advisors are on hand to help you understand the nuances of the terms and conditions and to help you select the best loan option for your needs. Pick these expert’s brains.
With the proliferation of crowdfunding models, sometimes money is available right in your own community. MoolaHoop puts you on the crowdfunding path by providing a platform where you essentially build a campaign by posting a description of your business, how much money you want to raise, and what you can offer in terms of reciprocity, such as deals on products or services. Capitalizing on the power of excitement and urgency, you have 21 days to complete your fundraising.
While knowing your business may seem obvious to you, it won’t be to others. Regardless of their flavor, lenders are still lenders and they want some guarantee that you understand the dollars and cents aspect of your passion. Before seeking a loan, begin refining your business plan to include a company overview, a description of your employees, details about your market and your business’ financial history, including why you think there’s opportunity to grow.
During a recent interview with the Huffington Post, the NWBCs Harris emphasized that now is the time for women to jump onto the economic wave. “We’re in a great economic environment for women-owned businesses, possibly a perfect storm,” said Harris. “Our research suggests there is a direct correlation with access to capital and revenue generation, we believe that it is imperative to get more capital in the hands of women entrepreneurs at the outset in order to improve the sustainability for women owned businesses, enhance greater revenue generation and increase job creation.”