Women entrepreneurs are often troubled with some unusual challenges such as procuring funds to finance their startups. Data shows many businesswomen resort to their savings or turn to family members or their partners to obtain the capital for their venture.
Based on the findings of the Babson College and Baruch College yearly poll, namely, the Global Entrepreneurship Monitor, 5,944 people were surveyed to understand the trends related to women entrepreneurs. There were people in the age group of 18-74 years. The survey showed that women who had startup ventures opted for an average of $10,000 as capital needed to cover their business costs. Then, there were some women, who took only half the amount to start their venture. That is because they borrowed the money from family members and friends.
According to an article published on https://www.inc.com, women entrepreneurs face a tough time obtaining business loans. Again, women also feel pessimistic related to the effect on their companies unable to procure the required capital. Based on some academic research, women owning a business have a hard time getting funding capital, as the bank officials employed various criteria for them.
That is the reason why women entrepreneurs are reluctant to apply for small business loans. The reason is the challenges they face and the myths surrounding a business line of credit. Here are six of these myths debunked:
1. A business loan is complicated
When you turn to a traditional bank to finance your startup, it will take some time and the process calls for detailed paperwork. There is no shortcut to it. Then, you will find less complicated, simple, and easy ways to procure a loan for your startup. Yes, there are less complex ways to obtain a business line of credit for women.
There are online lenders who will offer you a loan with online communication or a simple phone call. You can fill out the internet form and complete the application process in no time. Once you are through with it, you will get many financial products to choose from and use the best one to fund your startup. Who says that business loans for women involve complication? No way!
2. You need the assistance of a man
Based on the findings of researchers at many Ivy League Colleges, banks and investors like to lend business capital to handsome males who bear a resemblance to them, more than the women entrepreneurs do. Such findings make women think they need to accompany a good-looking man to represent their startup to obtain the required funding.
It is a myth today because online lenders acknowledge the potential of women entrepreneurs and their exemplary growth possibilities in the corporate world. The lenders also know that women are capable of borrowing business capital and have the ability to repay the same.
3. Business loans are available through local banks
When you have a small business to manage, it is imperative to opt for the right lender. You must always choose a lender, which has been in business for many years and have a good reputation. Then, your local bank may not offer you a small business loan or the best terms.
In such a situation, opt for online lenders who have a wider network of financial agencies that will offer you a commercial loan for your startup. You will get the required funding as well as reasonable rates of interest. There are lenders such as https://www.libertylending.com/ that offers a business loan on simple terms to women entrepreneurs.
4. Women must have a healthy credit score
This is the greatest of all the myths. Though having a good credit rating is ideal for an easy loan approval process, but not mandatory when you borrow money from online lenders. Even if you have a poor rating including a bad FICO score, you can apply for a business line of credit. The rules are the same for men and women. When men can get business loan approvals, so can you. There is no doubt about the same. Therefore, do not lend your ear to such fallacies.
When it comes to online lenders, they are flexible in their terms and understand that an unexpected event or some crisis led to your bad score. Therefore, you’ll not be disqualified for a small line of credit just because you have a poor credit rating.
The myth has no merit. Therefore, ignore it. Your lender will approve your loan based on factors like the span of your business and your average monthly earnings from your venture.
5. Payments are difficult to handle
Whether you have an existing business or planning to set up your startup, the myths may make you pessimistic. You may have a negative approach when applying for a business line of credit. You do not know how they work. People believe that such loan payments are hard to manage. Wrong! On the contrary, small business lines of credit help you to manage your cash flow in a better way. That is the reason why many women entrepreneurs have succeeded in their endeavors.
When it comes to small business loans, they are not hard to manage or budget for if you know the rules of the game. You will find many flexible repayment terms available with online lenders. You need to research online and choose the best business loan provider.
6. You will need sufficient collateral for loan approval
There are many small business loan options on the internet. Therefore, it is easy to get muddled and think that you will need enough collateral security for loan approval.
Women who have a business or plan to start one may have less collateral than men do. Then, there are business lines of credit available for women with no collateral. The lender will check whether your business generates enough revenue to repay the loan. You need not attach your home or vehicle to borrow money.
Now that these myths busted, you can apply for a business line of credit and become one of the top women entrepreneurs with a thriving business.