Small businesses (generally defined as businesses with fewer than 500 employees and average incomes of less than $ 2 million) are the engine of growth in employment. In fact, small businesses provide jobs for more than half of the country's private workforce and have generated nearly two-thirds of new jobs over the past 15 years. Small businesses pay 44% of the private payroll of the United States and account for 97% of all US exporters, according to the SBA's Bureau of Research and Statistics.
Why are business loans for women-owned businesses important?
In their 2016 report on women-owned businesses, American Express OPEN and Womenable examined trends that occurred between 2007 and 2016. The report found:
- There are now 11.3 million businesses owned by women in the United States.
- Women-owned businesses employ nearly 9 million people and generate more than $ 1.6 trillion in revenue
- Women-owned businesses now make up 38% of the business population, employ 8% of the country's private sector workforce, and contribute 4% of the country's business income.
- Since 2007, more than 1,000 new businesses owned by women have been launched every day. In addition, from 2007 to 2016, the number of women-owned businesses increased by 45% (while the total number of businesses grew by 9%). Thus, during this period, the number of women-owned businesses grew five times faster than the national average.
Despite all of this good news, women entrepreneurs are still far behind their male counterparts in key financial categories, according to Biz2Credit's annual gender survey on 25,000 small businesses. Revenues have increased significantly, but there is still a large gap between sales of male-owned and women-owned businesses. In addition, research found that the average loan size for women-owned businesses ($ 99,009) was 6% lower than that of men-owned businesses ($ 105,172) last year.
In 2016, borrowers who had prudently refrained from borrowing money for the expansion or enhancement of capital assets reinstated the credit markets. Because the economy was relatively strong and interest rates were so low, women business owners were willing to take more risks … and they did. Meanwhile, the average annual earnings of women-owned businesses amounted to $ 117,064, an increase of 61%.
Best Sources of Business Loans for Women – Where Can Women Get Money?
1. Loans to small businesses
Traditional bank loans and loans guaranteed by the SBA are available, and approval rates are the highest they have been before the Great Recession. The latest Biz2Credit Small Business Lending Index reveals that nearly one in four large banks approved small business loans in August 2017, while small banks have granted nearly half of their funding applications.
There are many grant programs to help women entrepreneurs. A big advantage for those who receive them is that grants should not usually be repaid. Some of the women-focused grant programs – and some non-gender specific – are:
- Eileen Fisher Business Grant Program: Eileen Fisher grants are awarded annually to 100% of women-owned businesses that have foundational principles of social conscience, sustainability and innovation. Candidates should be ready to move on to the next phase of development.
- FedEx Think Bigger – Small Business Subsidy Program: Over the past five years, the FedEx Small Business Grant Competition has awarded hundreds of thousands of dollars to innovative small business owners in the United States. nationwide. Candidates are encouraged to share their visions to receive a portion of the $ 75,000 grant. Part of the judgment involves the general public voting for the finalists, so that participants can promote their businesses while collecting votes.
- InnovateHER: Sponsored by the SBA, Office of Women's Business Ownership, the InnovateHER Challenge rewards laureates up to $ 40,000 in prizes for companies that have a product or a marketable service that has a positive impact on women's lives.
- Research on Innovation in Small Businesses (SBIR): Eleven federal agencies participate in this price-based program. SBIR is a highly competitive program that encourages small national businesses to engage in federal research / development and research (R / D) that has marketing potential.
- Wal-Mart Women's Economic Empowerment Initiative (WEE): The Wal-Mart initiative provides opportunities for US and international companies. Through its Global Initiative for Women's Economic Empowerment, Walmart is working to improve the lives of women around the world by providing more training, market access and career opportunities to nearly one year. million women, many of them on farms and factories.
3. State and Local Small Business Grants
National small business grants are limited in number and highly competitive. Many times, there are better opportunities for grant funding at the local level. Use the Internet to research subsidy programs in your area. Every state and many major cities have economic development agencies designed to strengthen the local economy. Some of them have small business grants available. In addition, SBA sponsored Small Business Development Centers (SBDCs) provide individualized business advice. SBDC advisors can inform women entrepreneurs about grants and other business financing opportunities in the region.