Why Women Are Launching Their Businesses With Alternative Financing
In today’s business world, there are still people that feel that women shouldn’t be given the same rights and privileges that men already have. Having fewer business resources available to them, success-driven women are finding alternative financing to start the business that they’ve been thinking of.
To get the money they need, some women have opened a business line of credit account. The line of credit has been used for seasonal sales slumps; to purchase equipment and inventory, pay off debts, and other business expenditures. A business line of credit is similar to credit cards, in that after being approved by the bank, borrowers can have access to a specific amount of money. Women are able to have the money there when they need it, repay the money and then start using the money all over again with this form of alternative financing.
For some, receivables financing has been the solution to their cash flow problems. With receivables financing, a lender purchases a business’ accounts receivables accounts. The purchase of the receivables is based on the credit of the customer. The lender, also known as a factor, will give the business owner a percentage of the total dollar amount of invoices, usually between 70 and 90 percent. When the customer pays the invoice, you receive the remaining money owed minus a lender’s fee. You don’t need any collateral to get the loan since the invoices act as the collateral. With this type of alternative financing, having bad credit is not a problem and you can get the money quickly.
The Small Business Administrations has many different loan programs for women. To receive help from the SBA, a company needs to have a good business credit report and business plan to show to the lender. Women have used the loan proceeds to purchase real estate, equipment, and increase working capital. SBA loans give you generous repayment terms, along with reasonable interest rates and the lowest down payment requirements. Even if you don’t fit into the lenders’ strict loan criteria, you can still be approved for an SBA-backed loan. There are several SBA loans available that may fit your particular situation.
Female business owners have come to the realization that they have to “think outside the box” when starting or expanding their business venture. The money they need for payroll, inventory, equipment and various other business purposes hasn’t been available through conventional channels. The use of alternative financing will allow them to grow their business and show others that they have what it takes to run a successful business.