Being a female entrepreneur seeking financing. We’ve got 3 tips to help!
Women’s History Month is a time to celebrate achievements women have made over the course of American history, however one only needs to look to growth the last five years to be impressed as women-owned businesses grew more than 21%.
Despite the incredible growth, women-owned businesses are still in the minority of overall business ownership, and statistics indicate that female entrepreneurs start their companies with 50% less capital than their male counterparts.
Small-business loans from banks typically come with the lowest costs, but toughest eligibility qualifications. In 2016, large banks approved 50% of women-owned business applications and small community banks approved 67% — the highest among all funding sources — according to the most recent data from the Federal Reserve.
The US Small Business Administration is doing a lot to address some of the inequity in funding for women-owned businesses with government-guaranteed SBA loans making it easier for female business owners who can’t qualify with a bank to obtain financing.
“Navigating loan options and programs can be challenging for any entrepreneur. As with anything in life, aligning yourself with good advisors to understand your business and best financing options should be the role of a banking partner – at least we like to think so at Centrust Bank,” shared Matt Tilton, President of Commercial Lending.
We asked Brenda Baird, CEO of WBENC certified, Truly Engaging by MagnetStreet, for her top three tips of how women-owned business can approach their financing needs.
Tell the Success Story
When you are seeking financing for your business, you are doing so because you have a need to fulfill. When speaking to banking partners, don’t focus so much on what the need is – rather focus on what the financing will help you achieve. Discussing projected growth from the ability to purchase critical equipment and funding essential labor shows forward-thinking. Be ready to show how funding creates momentum.
Build a Critical Network
As a woman who raised a family and was out of the workforce for years, I understand how difficult re-entry can be. It has been a privilege to provide opportunity to qualified women who are coming back to work seeking either part time or full-time positions in the world of manufacturing. Whether in management or at the packing level, women are playing a critical role in our business. Building a team of trusted women and men that work together to problem solve in an environment filled with supply chain and labor challenges has been richly rewarding. Women who have gone before me have set an example of integrity and discipline and my hope is to do the same for others. Networking with other women has led to thoughtful discussion on everything from multi-tasking to critical sustainability issues we face. I have experienced kinship in working with women but am also grateful for the many men who have encouraged and influenced me along the way. Together, the women and men in our company are working together to increase efficiency and prepare for the explosive growth we have projected for the future.
Find the Right Banking Partner
There are banks that have programs specifically supporting small business enterprises. Seek out community banks (and specifically ones that have supported women-owned businesses) and be ready to share your business plan. Explain how you plan to pay the loan, including the challenges you foresee and how you are addressing them. Be prepared and confident.