Finding Financing for Female-Owned Businesses

The number of women entering the world of business continues to grow. Today, 40% of small businesses in America are owned and operated by women. However, there’s a difference in funding when it comes to businesses started by women as opposed to men. When they’re starting a small business, women typically ask for less funding than men do in their loan applications. They’re also more likely to be denied financing than men are. Right now, accessing funds is incredibly important for many women-run small businesses.

Some of this is because business people aren’t always aware of the funding options that are available to them. There are a variety of places where business owners can seek out capital. The best way to secure financing is for women to be clear on what they want to use the funding for. There are loans for various business needs, from equipment financing to inventory loans and merchant cash advances. Business owners aren’t limited to traditional SBA loans, banks, or credit unions.

Equipment financing can be an excellent way for businesses to upgrade or expand. Examples of equipment that can be financed include ovens, conveyor belts, trucks, and more. One advantage of this form of financing is that it is often 100% deductible. The only requirement is that the equipment is used during the tax year. Inventory loans use the things that are for sale in a store as collateral to secure a loan. These are one option for businesses that sell concrete products, not services. Finally, merchant cash advances are a loan against future credit card purchases.

While these are good options for some businesses, an SBA loan is often the best bet. The Small Business Administration allows women to borrow up to $5 million. Typically, repayment terms range from five to ten years. These types of loans can also be used for real estate purchases. In that case, the term can be extended up to 25 years. Loans under $25,000 do not require collateral to be secured. Personal guarantees are typically required from parties who own more than 20% of the business.


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by LisbethCherrington

Located in Hilton Head, South Carolina, Lisbeth Cherrington is a successful entrepreneur. Lisbeth and four other female founders created Smart Company Kids, a company that gives kids a financial education and teaches them about how it fits into their everyday lives.

Lisbeth, a longtime financial advisor, has been aware of the gap in financial education and Smart Company Kids allows her to get to the root and fill in the gaps of finance where traditional education fails. Lisbeth, or Libby as she's known to her friends and colleagues, has been able to develop a platform for home and school with the focus of learning through play. Libby believes that children are sponges and teaching them about finance early through fun and play can result in a great financial future.

For more information on Smart Company Kids or Lisbeth Cherrington, please visit her on social media!