Tips for Women on How to Score Business Funding
More than 126 million women around the world were starting or running their own businesses in 2012, and their numbers continue to grow. Globally, social norms and cultural restraints leave women lagging behind men when it comes to business, but nonetheless, women account for about one-third of entrepreneurs in the world.
Here, we offer ideas about loans, grants, and government contracts, along with encouragement to keep going until you’ve found ways to fund your dream.
When it comes to business loans, most financial institutions do not look at the applicant’s gender, but only at their credit history and business practices. Of course, this does not necessarily mean that you will get approved for a business loan just because you apply. It will require a bit of thought, patience, and courage to approach the process.
Women-Targeted Business Loans
There are business loans out there that are targeted specifically to women. An internet search can lead you to financial institutions that offer these loans, but be careful. You really shouldn’t submit an application to every institution that offers a loan you think you might qualify for, but only select one or two and go from there.
That’s because applying for some types of loans can affect your credit score, so approach the process carefully. Business loans, as well as mortgage, student, and auto loans are often exempt from these restrictions, but it would be wise to consult with a financial agent prior to completing and submitting any loan applications, just to make sure applying for multiple loans will not affect your credit score.
Governments Value Diversity
Diversity is a goal of many governments, as minority- and women-owned businesses provide unique perspectives and add to local economies in ways that traditional businesses often overlook. As a matter of fact, when it comes to women-owned businesses, it has been shown that when women thrive, families, communities, and entire economies also thrive.
That’s why in the US, the Small Business Administration works to level the playing field for women with its Women-Owned Small Business Program, which has a goal of awarding 5 percent of prime and subcontracting dollars to women-owned small businesses. And a juicy government contract beats a loan any day, wouldn’t you say?
Governments of other countries also encourage women entrepreneurs with various funding programs and other incentives.
Look for Help from Nonprofits
If you do a little online sleuthing, you can find nonprofit organizations that grant awards to women who are interested in starting a new business or buying an existing one. There are several of these organizations, so be sure continue your search until you’ve found a grant you can qualify for, then carefully prepare your application.
The guidelines are generally strict and restrictive, but you could very well qualify and get approved for one of these grants. Who knows? If you get lucky, you could be approved for a grant large enough to cover the down payment on a new business.
And the coolest thing about a grant? You don’t have to pay it back.
If your business doesn’t happen to land a juicy government contract or a nonprofit grant, there are government loans and grants available.
The application process for government grants can be time-consuming and you’ll need to do some legwork before you even begin. For instance, you’ll need to provide the agency with a rundown of your business idea as well as complete the usually rather lengthy application. Keep in mind that the committee responsible for reviewing applications will be more inclined to take your application seriously if it is accompanied by a solid business plan.
It could take several weeks or months before you receive a response to your grant application, and you might not receive the full amount you requested, but don’t let that stop you.
Use the ideas you’ve found here and keep pushing until you receive enough money to help you push your business idea forward.