Business, once the exclusive domain of men, has seen many women business owners coming onto the scene in recent years. Between 1992 and 1997 the growth of women-owned businesses was nearly three times the percentage of the increase of all other business enterprises. In 1997, the number of women-owned firms stood at a figure of 5. 4 million. In another ten years when people are analyzing the first decade of the twenty-first century, this figure will most likely have grown.
Why Loans Are Needed
Home-based businesses run by women continue to increase, since many women prefer the convenience of looking after their children and homes in addition to running a business. Loans for running such businesses are essential as essential for women as for men. Many women have also proven they are adept at buying existing businesses and running them successfully. This necessitates loans for a variety of purposes, including buying and running a business, expansions, buying special equipment, maintaining sufficient inventory, and maintaining retail trade.
How Small Business Administration Helps
If women are unsuccessful in obtaining loans from conventional sources, the US Small Business Administration (SBA) guarantees small business loans on reasonable and convenient terms to women entrepreneurs. These loans can be used for any of the purposes mentioned above. If a lending institution does not feel confident about granting a small business loan to a particular applicant, the applicant can approach SBA for a loan guarantee, which means that if the loan recipient falters in repaying the loan the SBA will reimburse the lender.
The Criteria For Getting An SBA Loan Guarantee
Provide historical financial statements and projections to prove that the business can repay the loan. The ability to incur more debt should be exhibited. Some form of collateral should be provided, although it need not cover the full extent of the loan. A good personal credit report is essential and if it is tainted, there should be enough evidence that determined efforts were made to rectify the problem. The small business and its owner should fulfill all their tax obligations. There must be no attempt to get any loan from other sources at the same time. The loan request must demonstrate that the loan could not be obtained elsewhere and that the loan will benefit the business substantially. The business owners must prove that their personal resources are not adequate to cover the loan amount needed.
The tremendous growth of female owned firms is evident from the 1997 Economic Census, which stated that such firms constituted 26% of the nation’s 20. 8 million non-farm businesses and employed 7% of the 103 million workers. The growth rate has increased considerably since then and it is expected to go up even further over the years to come. Keeping in view the high economic and employment potential, it is apparent that business loans for female small business owners are a necessity.
Additional Help
There is software that can help in the starting and the running of a business. This software is reasonably priced for small business owners and much of it is geared toward the operations of small business.
Posts Tagged ‘Small Business Administration’
Understanding Small Business Loans For Women
December 31st, 2009Now is a Great Time to be a Woman Small Business Owner
December 29th, 2009In the last 20 years, where women work, how women work, and what kinds of jobs women are seeking have changed. As more and more corporations have re-organized and downsized, as more children of Baby Boomer mothers are leaving home, and as more traditionally employed women are waking up to the fact that they want more out of life than just simply getting a paycheck, the world of small business ownership is exploding.
As a whole, the United States is becoming more entrepreneurial. More than 1/3 of all people involved in entrepreneurial activity are women. According to an April 2005 report by the U. S. Small Business Administration, Office of Advocacy and Business Times, there are an estimated 10 million privately held businesses in the United States that are owned by women.
More people own small businesses in the United States than ever before. According to the U. S. Small Business Administration’s report dated June, 2006, it is estimated that there are 25. 8 million small businesses (including self-employed and sole proprietors) in the United States.
According to the same report, over the last decade small businesses have generated 60 to 80 percent of new jobs, and they employ 50. 6 percent of the country’s private sector workforce.
In addition to starting new businesses, there are also an increasing number of entrepreneurial Americans who are buying existing small businesses, instead of starting their own. According to a report by Wachovia, small business acquisitions are growing in popularity. On any given day in the United States, 1. 7 million businesses are for sale.
Why Women are Starting Businesses
Women are starting businesses for two main reasons: lifestyle and money. Many run their businesses from home so they can be there for their children, instead of being dependent on daycare and other non-family support care.
Other mid-Baby Boomer women (those in their 40s) have achieved a level of success in the traditional workplace and are striking out on their own, eager to call their own shots and take charge of their financial futures.
Older Baby Boomer women are retiring early to start new businesses. According to AARP, entrepreneurship is growing in those 50 years and older. In addition, they predict that people who take early retirement or whose jobs just disappear will drive solo business formation in the future.
Two Greatest Challenges to Women
The greatest challenges for women starting up businesses are access to capital and general lack of know-how. However, these challenges are not stopping women from starting up. Today, women have the same access to money as men do. In fact, many start-up fund sources are specifically targeting women through grants and new venture capital. Women can be as creative in their approach to money as they want to be, making use of incubators, partnerships, or more traditional methods of funding such as home equity lines of credit, angel funding, or commercial loans.
Women are also realizing that, just because they don’t have a business degree, it doesn’t mean they won’t be successful at running a business. Accounting needs can be outsourced. Teleseminars can be taken. Books can be read. Questions can be asked. Experience can be gained. Women know that they don’t have to do it all by themselves!
In addition, women are finding that their life and work experiences count for something when starting up a business. They recognize the treasure-trove of applicable, relevant experience that they have amassed over the years and are tapping into these storehouses for their start-ups. Moreover, they know that whatever they don’t have right now, they can learn as they go.
If you are a woman considering small business ownership, this is a perfect time for you. Don’t let lack of money or expertise stand in your way. Have confidence in your valuable life experience, and draw from it when starting your business. Then get creative about funding. Never before have banks and other creative lending sources been more supportive of women-owned small business start-ups.
How To Get Easy Grants for Small Businesses from the Government
December 22nd, 2009Several states have small business government grants. These are not offered by the federal government but a number of state-run development agencies provide free government grants. The states that offer these are Kansas, Nebraska, New Hampshire, New Mexico, and Utah. Other states provide financing through loans with incentives to those who want to start a small business rather than free government grants.
Instead of money the government will give free advice and training to those who want to make their business grow. The United States Government’s Small Business Administration (SBA) is where the free government grants originate from. Since fifty percent of the labor force comes from the twenty five million small businesses in the United States and that contributes more than half contributes to more than half of the country’s gross domestic product (GDP), there isn’t much question why the government is interested in the quandary of the small businessman.
The free government grants come with free counseling, training, and technical assistance. The Small Business Development Centers (SBDCs) have full and part time staff that will get help from the private sector to give the business whatever help that they need. This help usually comes in the form of consultants, engineers, and testing laboratories. The grants offered can be found in the Catalog for Federal Domestic Assistance (CFDA) website http://www. sfda. gov under the “Small Business” and “Small Business Person” beneficiary category. You can browse this free government grants for small business at CFDA free of charge.
The SBA has no funds of its own actually available to supply to small businesses. They depend on the private sector such as banks, credit unions, coops, etc. to provide loans then they guarantee the loans. These loan programs are Loan Guaranty Programs, SBA LowDoc Loans, SBA Express Loans, and Microloan Programs. Targeted Loan Programs are also offered such as defense-delta loans, CAIP loans, Pollution control loans, and Export Express Loans. These loans are meant to target or meet specific needs. Since these places are all ready aware of the SBA you only need to mention SBA for the banks etc. to know immediately what to do.
While free government grants could of course be very useful to any business. The help that a business receives need not be money to be useful. The advice that a business receives can be just as invaluable. The professional service could be worth more than money itself. As the old line says “give a man a fish and you feed him for a day, teach a man to fish and you feed him for life. ” The success of these businesses can only be beneficial to the government in the long run so the advice given is definitely the best.
