Women owned businesses are breaking new ground in the US. Businesses owned by women generate $1.2 trillion in annual revenue, yet many of these entrepreneurs had to start their venture with less capital and their path to success is impeded with financial barriers. This is why the SBA’s Office of Women Business Owners and other organizations are working to help women on their path to success.
Small Business Requirements
Women who are applying for a small business loan need to have a good credit score from a business reporting agency, and a sound business plan. If the business is low-risk, it will have a better chance of receiving funding than a high risk venture.
On average, women start their businesses with half as much capital as their male counterparts. Other financial barriers include:
- Only .1% of women who apply for venture capital receive it
- Only 25% who apply for angel funding receive it
- 55% of women use their personal savings to start a business
- Only 5.5% apply to financial institutions, including banks for small business loans
Bridging the Gap
Small business loans are important to help bridge the gap to meet the financial needs of a startup. While women and men have issues obtaining a small business loan for a new business, women are statistically at a disadvantage. Organizations that include the Small Business Association, Score and the National Women’s Business Council have created training and assistance to help women obtain a small business loan as well as to survive and thrive in their new venture.
These organizations provide mentoring to help women learn the necessary skills to improve the chance of success. They also help women learn important business skills to make sure that they can build their company on a solid foundation.
Many of these organizations also teach women how to apply for the special loan programs created for women by the SBA and others.
Becoming the Next Success Story
Organizations are creating ways to level the playing field for women entrepreneurs. By working with these organizations, financial institutions, and potential investors, women are able to create the businesses of their dreams.
If you are looking to start a new business contact our financial experts. They can help you understand how to apply for a small business loan and resources that are available to help improve the odds of receiving funding.