Rewards For Women Obtaining Business Loans Making functioning funding, service finance funding, as well as various other financing offered to ladies is a lot more essential in today’s expanding small company sectors. Extra ladies are ending up being local business owner, as well as the outcome is an expanding requirement for bank loan from financial …
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Are Unicorns Real? The Myth of Start Up Business Loans for Women
The True Story of Start Up Business Loans for Women and More Resources for Female Business Owners Studies show that forty percent of new entrepreneurs in the United States are women. In addition, the number of businesses owned by women is growing at twice the rate of those owned by men, according to Kauffman. We … Continue reading Are Unicorns Real? The Myth of Start Up Business Loans for Women
Are Unicorns Real? The Myth of Start Up Business Loans for Women
The True Story of Start Up Business Loans for Women and More Resources for Female Business Owners
Studies show that forty percent of new entrepreneurs in the United States are women. In addition, the number of businesses owned by women is growing at twice the rate of those owned by men, according to Kauffman. We dive deep into start up business loans for women.
You might think this means that there are more start up business loans for women. That isn’t the case however. In fact, according to research done by Fundera, 3 out of 4 female business owners do not even apply for business loans. Those that do are asking for less money. About $35,000 less to be exact.
Even more discouraging is this. While about half of all business owners who apply for loans are approved, only 30% of women business owners get approval. This is from a study that Dun & Bradstreet did with Pepperdine University researchers.
- It is more likely that businesses owned by women will report a high credit risk. Studies show 41% of women-owned businesses report a medium to high credit risk. Only 33% of male-owned businesses report the same.
- Women-owned businesses rely heavily on SBA products and credit cards. This means they are utilizing less equity and fewer types of debt than male owned firms.
- Business owned by women are more often mismatched with funding sources. This causes them to experience funding gaps persistently, even if they have lower credit risk.
Learn business loan secrets with our free, sure-fire guide.
Start Up Business Loans for Women: Where Should Women Business Owners Look for Loans?
The truth is, unicorns do not exist. Neither to business loans specifically for women. Despite the unsavory statistics, women can get regular business loans, and there are ways to increase your chances.
A lot of the variables are outside of the borrower’s control. However, we can help you find the best places to look and the most likely sources of funding to help ensure your business does not become a statistic.
According to a survey by the Federal Reserve Bank, businesses owned by females are more likely to gain approval for loans at small banks. In fact, 67% are approved at small banks. This compares to only 50% at large banks. Those that have loans with smaller banks also note a higher satisfaction level.
What’s that mean practically? It’s probably best for women business owners to stick to smaller banks. There are more ways to increase your chances of success in finding funding however.
Use All Available Resources
These are things that every small business owner should do to increase their chances of loan approval, but female business owners should be especially prudent. There are a host of resources out there geared toward helping women business owners get the funding they need to start and run a successful business.
Small Business Administration
While the SBA exists for all small business owners, their Office of Women’s Business Ownership exists to help women business owners specifically. According to SBA.gov, “The Office of Women’s Business Ownership’s mission is to enable and empower women entrepreneurs through advocacy, outreach, education and support.”
They work with firms to ensure the best resources are available to women entrepreneurs at all stages. Whether starting a business, applying for a business loan, improving an already established business, or looking for government contracts, their mission is to support female business owners. If that’s you, this is definitely a good starting place.
National Women’s Business Council
The NWBC is a federal advisory council. It serves as a source of advice to the government on women’s business issues. Its mission is to encourage initiatives, programs, and policies to support women in business at all stages. This includes start up all the way through growth, expansion, and significance.
Other Resources for Female Business Owners
In addition to those agencies listed above, these organizations offer research and support to women owned business in many ways.
According to their website, the AWBC operates a network of women’s business centers that, “help women succeed in business by providing training, mentoring, business development, and financing opportunities to over 145,000 women entrepreneurs each year.”
The NAWBO offers national events, training opportunities, and other resources for female business owners across the country.
NAFE offers training opportunities, events, and other resources to help women in business succeed.
“SCORE is the nation’s largest network of volunteer, expert business mentors, with more than 10,000 volunteers in 300 chapters.” Get matched with a mentor or take a workshop to help you learn what you need to know to achieve business success.
What Does this Have to Do with Start Up Business Loans for Women?
Here’s the thing. Since we have established that unicorns and specific start up business loans for women are both myths, we know female business owners will always have to compete with male business owners for loans. The more support and education you have behind you, the better.
Use these resources for support and education, but also to help you find other sources of funding besides start up business loans for women. There are grant resources available through various local industries and businesses as well as certain corporations and professional organizations. These agencies can help you find those funding sources. They can also help you prepare for the application process.
Learn business loan secrets with our free, sure-fire guide.
How to Get Start Up Business Loans for Women
Now, as for traditional business loans, the best thing to do is be prepared. Most lenders need to see the following:
- Business Financial Statements or tax returns for the past 3 years
- Personal Tax returns for the past 3 years
- A professional business plan
- They will run a credit check, and the minimum credit score varies by lender.
- Other information at the discretion of the lender
- Always inquire about the application process on the front end so you can have any additional materials prepared.
The more of this you have prepped and ready to go, the faster and smoother the process should run. This information is what is required of a typical, traditional lender. There are non-traditional lenders that may require more, or less, information. You would be hard pressed to find a traditional loan that does not require a personal credit check, but there are other options.
Business Credit
If you are looking for start up business loans for women, you must need business funding. There are options for funding that rely on your business credit rather than your personal credit. What is business credit? It is exactly like your personal credit, except it is based only on the credit history of your business. This means that it is not affected by your personal credit history. Also, your personal history is not affected by anything that is on your business credit.
This is good for many reasons. First, you can access funding for your business despite a poor credit history. That is an obvious benefit. What some do not realize is, even if you pay on time, using your personal credit for business transactions can be detrimental.
That is because business transactions are, by nature, large. Personal credit limits are typically much lower than business credit limits. Because of this, business transactions can max out personal credit quickly. Consistently carrying balances near your limit negatively affects your debt to credit ratio. That, in turn, lowers your credit score even if you are making consistent on-time payments.
How to Get Business Credit
Every business needs business credit, even if you intend to apply for traditional loans. Sometimes lenders will look at business credit along with personal credit if it is available. However, it also opens up doors to other options if the traditional route isn’t going to work for some reason. If you have good business credit, your business is fundable.
The first step in establishing business credit is to ensure your business is recognizable as an entity separate from you personally. It has to stand on its own. This means that you must incorporate rather than operate as a sole proprietorship or partnership. You can organize as an s-corp. LLC, or full-fledged corporation. They each have their own benefits and costs, but for the purposes of establishing business credit they function equally.
The Rest of the Business Credit Story
Aside from incorporating, you will need to take a few other steps to lay the foundation for business credit.
- Obtain a separate business address and phone number. Make sure the phone number is through a toll-free exchange. List both in the directories under the business name.
- Get an EIN. This is an identifying number for your business so you do not have to associate it with your Social Security Number. Get one for free at gov.
- Apply for a DUNS number from Dun & Bradstreet. It’s free on their website, but beware. They will try to sell you a bunch of stuff you don’t need. Put on your blinders and power through. All you need is the number and it is free.
- Open a dedicated business checking account. Take care to run all business transactions through this account.
- Set up a professional website and dedicated business email address. The email address should have the same URL as the website and should not be from a free email service. Gmail and Yahoo will not work here.
What’s Next?
Once you have the foundation for business credit, you can start building. This is done in layers, or tiers. For example, the first tier is the vendor credit tier. This is the starting point because they will extend net 30 terms on invoices without a credit check. Then they will report your payments to the business credit agencies. This is how you begin to build business credit without involving your personal credit. By applying with your EIN rather than your social security number, you keep your personal name out of the equation altogether.
Who is in the vendor credit tier? There are dozens of vendors that will work with you in this tier. Some of the easiest to get started with include Quill, Uline, and Grainger. They each offer products that pretty much any business can use on a regular basis, so it’s simple to open an account and begin doing business with them.
After you have 5 or so accounts reporting from the vendor credit tier, you can apply for business credit cards from the retail credit tier. These are store cards from retailers such as Best Buy, Amazon, and Office Depot.
Learn business loan secrets with our free, sure-fire guide.
Get 10 or more of these reporting and you can apply to cards in the fleet credit tier. Cards from companies like Fuelman and Shell are in this tier. They can be used for automobile maintenance and gasoline purchases.
After that comes the cash credit tier. Once you have enough accounts reporting on time payments from these three tiers, you can apply for general business cards from companies like MasterCard, Visa, and American Express. At this point, your business credit is pretty well established, and it is not attached to your personal credit in any way.
Other Options for Established Businesses
If you have accounts receivable, you can consider invoice factoring. This is a way of selling your open invoices for less than cash value, but you get the cash immediately. If you have credit card sales, there is the option of a merchant cash advance. With this option, you receive a cash advance for your average daily credit card sales. Payments are typically deducted from future credit card sales on a daily, weekly, or monthly basis.
While neither of these options are ideal, they are valid and can be exactly the push you need to get your business through a tough spot.
A Final Word About Start Up Business Loans for Women
So that’s it then. Unicorns do not exist, and neither do specific start up business loans for women. There are grants that are geared specifically toward women entrepreneurs, but for the most part funding is non-gender specific. The challenges faced by female business owners can only be mitigated by solid preparation and education.
Having a solid business credit score is essential also. This will open up a world of funding options that would not be available otherwise. Business credit cards and products from non-traditional lenders are a valid option if you find yourself facing issues with start up business loans for women. That’s the important thing to remember. Just because unicorns do not exist doesn’t mean dreams do not come true. There are plenty of other options, and a white horse is almost a good as a unicorn. Business credit can be your white horse.
The post Are Unicorns Real? The Myth of Start Up Business Loans for Women appeared first on Credit Suite.
A Smart Business Women’s Guide to Small Business Loans: Stock Up on Tools to Help Find Loans for Women to Start Business
A Comprehensive Guide for How to Get Loans for Women to Start Business
Research shows that forty percent of brand-new business owners in the United States are ladies. Furthermore, the variety of businesses owned by women is growing at twice the rate of those possessed by males, according to Kauffman. You may assume this indicates that there are more loans for women to start business. That isn’t the situation however.
As a matter of fact, according to research done by Fundera, 3 out of 4 female local business owners do not even apply for company financing. Those that do are requesting much less than their male counterparts.
Are There Business Loans Just for Women?
Not really. There are not a lot of specific business loans for women to start business. There are, however, a ton of resources to help women find loans. Organizations exists that work toward helping women business owners access all their resources and find the funding they need. Also, some loans work better for women business owners than others, and these organizations can help you find the best ones for you.
According to a survey by the Reserve bank, women owned businesses have better chances of getting funding at smaller banks. As a matter of fact, 67% of loans for women to start business are authorized at smaller financial institutions. This compares to only 50% at large banks. Those that have loans with smaller banks are generally more satisfied with the service they receive.
What’s that mean? It’s probably best for female local business owners to stick to smaller, community banks. There are other options though.
Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.
Pack Your Tool Bag
The key is to have a stock of tools you can use to help you find loans for women to start business. These are sources and resources that every small company proprietor needs in their arsenal to enhance their chances of funding approval, especially women. Some are even designed specifically to help women, though not all offer funding. Those that do not, however, definitely know how to help you find and get the funding your need.
The Everyday Essential: Small Business Administration
While the SBA exists for all small company owners, their Office of Women’s Business Ownership exists to help women local business owner particularly. According to SBA.gov, The Office of Women’s Business Ownership’s is here to enable and empower business owners that are women via advocacy, outreach, and education as well as assistance.
They work with firms to make sure the best resources are available to women business owners at all stages. Whether starting a business, looking for a company financing, enhancing a currently developed business, or trying to find government agreements, their mission is to support the female company owner. If that’s you, go here first.
National Female’s Service Council
The NWBC is a federal advising council. It works as a resource of guidance to the government on women’s organization problems. The objective is to encourage campaigns, programs, and policies to sustain females in service at all phases, from startup to growth, and hopefully to expansion and sustainability.
Other Tools to Consider
Along with those firms listed above, these agencies provide support to women owned businesses.
The AWBC runs a network of business centers geared toward women. These centers labor to help women succeed by offering training, business development, financing, and mentoring opportunities.
This organization, also known as NAFE, sponsors events, provides training, and offers other resources to help female business owners achieve success.
The NAWBO works across the country to offer training, events, and other resources to women owned businesses nationwide.
With more than 300 chapters and 10,000 volunteers, this is the country’s largest network of expert business mentors that volunteer their time. They match female business owners with mentors, or they can participate in a workshop to help them learn what they need to know to be successful.
Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.
But What About the Loans for Women to Start Business?
Most females carry a bag of some sort, and women business owners need a bag of tricks and tools to help them get the funding they need. It’s not all black and white, and if the statistics listed earlier are any indication, it isn’t always fair either. At some point, all businesses need financing, and these tools are designed to help level the playing field with it comes to getting loans for women to start business.
Make use of these resources for assistance and education, and get prepared for what the lenders will want to see.
What Other Tricks Do You Need in Your Bag to Get a Business Loan?
Now, as for traditional business finance, the best thing to do is be prepared. A lot of loan providers need to see the following:
– Company financial statements or income tax return for the past 3 years.
– Personal Income tax return for the past 3 years.
– A professional business strategy.
– They will certainly run a credit history check, and though 680 is standard, minimal credit rating varies by lender.
– Various other info at the discretion of the lender.
– Constantly ask about the application process on the front end so you can have any type of extra documents prepared.
The more of this you have prepped to go, the faster and smoother the process should run. This info is typical of what a standard loan provider may ask for. There are non-traditional lenders that may call for more, or less, info. You would certainly be hard pushed to find a typical lender that does not need a personal credit history check, but there are other choices.
The Secret Weapon: Business Credit
Business credit is a vital secret weapon to have in your bag of tools. There are choices for funding that count on your business credit rating as opposed to your individual credit score. What is a business credit score? It is like your personal credit, except it is based only on the credit history of your company. It is not influenced by your individual credit report. Also, your personal history is not impacted by anything that is reporting on your business credit history.
This is beneficial for a few reasons. First, you can access funding for your business despite an inadequate credit rating. That one is obvious. What some do not recognize is, even if you pay on time, utilizing your personal credit history for company purchases can be detrimental.
That is because organization transactions are, naturally, big. Individual credit limits are typically much lower than company credit limits. Due to this, business transactions can max out individual credit scores rapidly. Consistently bringing the balances close to your credit limits negatively impacts your debt- to- credit ratio. That, in turn, lowers your credit score even if you are making consistent, on-time payments.
How to Get Business Credit: The Secret to the Weapon
Business credit opens doors to various other choices if the conventional route isn’t working out for some reason. If you have a good company credit report, your business is fundable.
The very first step in developing a business credit report is to ensure your company is recognizable as an entity separate from yourself. It needs to stand on its very own. You have to incorporate instead of operating as a sole proprietorship or partnership. You can organize as an s-corp, LLC, or corporation. They each have their own advantages and costs, but for the purposes of establishing business credit, they work similarly.
Next, you will need to take a few other actions to lay the structure for a business credit rating.
– Obtain a separate company address and also telephone number. Ensure the contact number is via a toll-free exchange, and list both in the directories under the business name.
– Get an EIN. This is a number that identifies your business so you do not need to connect it with your Social Security Number. Obtain one completely free at IRS.gov.
– Get a DUNS number from Dun & Bradstreet. It’s cost-free on their web site, but beware. They will attempt to offer you a bunch of things you do not require. Put on your blinders and power through. All you need is the free number.
– Open a specialized company checking account. Take care to run all organization transactions through this account.
– Set up a professional web site and also committed business e-mail address. The email address needs to have the same URL as the website, and it must not be from a cost-free e-mail service. Gmail and Yahoo will not work right here.
Forging the Weapon
Once you have the foundation for a business credit report, you can begin forging your business credit score. This is performed in layers, or tiers. For example, the initial tier is the vendor credit tier. This is the beginning point because these vendors will extend net 30 terms without a credit score. Then, they will report your payments to the business credit reporting agencies. This is exactly how you start to construct a company credit score without involving your personal credit. By applying with your EIN as opposed to your social security number, you keep your personal name out of the formula entirely.
How do you find these starter vendors? There are loads of vendors that will work with you in this tier. A few of the easiest to get started with are here. They each offer products that pretty much any business can use on a regular basis, so it’s simple to open an account and begin doing business with them.
After you have 5 or so accounts reporting from the vendor credit tier, you can apply for business credit cards from the retail credit tier. These are store cards from retailers such as Best Buy, Amazon, and Office Depot.
Get 10 or more of these reporting and you can apply to cards in the fleet credit tier. Cards from companies like Fuelman and Shell are in this tier. They can be used for automobile maintenance and gasoline purchases.
After that comes the cash credit tier. Once you have enough accounts reporting on time payments from these three tiers, you can apply for general business cards from companies like MasterCard, Visa, and American Express. At this point, your business credit is pretty well established, and it is not attached to your personal credit in any way.
Wielding the Weapon
So, say you have used every tool in your box and you still come up short. What then? That’s when you whip out this secret weapon you forged known as business credit. If you have followed the steps properly and worked through all the tiers, you have business credit cards you can use to fund your business. You also now have other options.
You can use that business credit to help improve terms and interest rates on traditional loans. They may still look at business credit, but stellar business credit can only help, not hurt, when it comes to loans for women to start business.
Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.
In addition, a strong business credit score can help you out when it comes to loans from non-traditional lenders. They can help you with approval and improve your terms and rates. Sometimes alternative lenders will even accept a business score in place of a personal credit score.
Wield Your Weapon Wisely
Even though loans for women to start business specifically are not really a thing, there are options to make the process easier women. A lot of resources are available to help women business owners be successful and find the funding they need. In addition, the challenges female business owners face can be mitigated by solid preparation and education.
Having a strong business credit score is important too. This will open up a world of funding options that would not be available otherwise. Business credit cards and products from non-traditional lenders are a valid option if you find yourself facing issues. Do not be afraid to jump into the fire and forge that business credit weapon. Once you have it, do not be afraid to use it. Not only can it tear down your funding foes, but it can also serve as a key to open the doors to the kingdom.
The post A Smart Business Women’s Guide to Small Business Loans: Stock Up on Tools to Help Find Loans for Women to Start Business appeared first on Credit Suite.
Can Women Entrepreneurs Change a Sexist System, When 98 Percent of VC Funding Goes to Men?
Why Men Get Substantially More Venture Capital than Women Entrepreneurs, and How to Change It
Over the past 20 years, there has been a 114% increase in the number of women-owned businesses. Women entrepreneurs are on the rise for sure, with more and more popping up every year. One might assume that, along with this increase, there has been a correlating increase in the number of female entrepreneurs that are getting venture capital.
While there may have very well been an increase, it is sadly disproportional. According to Crunchbase, in 2018 women entrepreneurs only got 2.2% of the $130 billion of venture capital investments in the United States.
What is promising, is that in Q1 of 2019, Crunchbase reports that 17% of venture capital investments went to businesses that had at least one female founder. Of this, 2% went to firms founded by females only while 15% went to firms with both female and male founders. This 17% represents $8.1 billion.
The increase is both significant and promising, but when you consider that 83% of venture capital investments in Q1 of 2019 still went to firms founded by men alone, you can see there is still an issue.
What is Venture Capital?
Before we can delve into the reasons behind more males getting venture capital than women entrepreneurs, it can help to remind ourselves of what venture capital is. It’s an investment. It is a group of investors taking a chance on the next big thing in an effort to gain a profit. They believe in the idea and the entrepreneur, and they are willing to go out on a limb, but not too far out.
The more perceived risk, the less likely the funds are to flow. So, do investors see more risk with women than with men? Do they see men as more stable or more capable? Maybe they just have more men asking for their money than women. Which one is it? Probably a combination of all three.
Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.
Why Don’t Women Entrepreneurs Get More Venture Capital?
There are a few reasons why women entrepreneurs are not getting the venture capital funds. Aside from the obvious gender gap that exists in virtually all of the business world because of a sexist culture in general, there are some other forces at work here. By understanding exactly what these forces are, we can better combat them. It is hard to fight an enemy that you cannot see clearly.
Lack of Women Owned Venture Capital Firms
While gender shouldn’t matter on either side of the money, studies show that is does. Female investors are more likely to invest in women entrepreneurs. Since only 9% of U.S. venture capitalists are women, this poses a problem. Seventy four percent of U.S. venture capital firms are male only. This clearly does not bode well for female owned start-ups.
Stereotypes and Approach
It seems that investors approach men with questions related to how they plan to win, allowing them to play offense. Women, on the other hand, are given questions related to how they intend to not lose. They are inadvertently put on the defensive, which lends itself to negativity.
Research has shown that, despite the numbers, even male investors invest based on feelings as much as numbers. Its much easier to feel warm and fuzzy about an offensive presentation than one that is already playing defense. Even if you are discussing ways to avoid losing, the idea of losing is still being discussed and therefore pushed to the forefront of the presentation, and then the minds of the investors.
Competence vs. Confidence
Women entrepreneurs tend to be competence focused. They meticulously go over all the numbers and present them as is. In contrast, men tend to oversell, erring on the side of confidence. They may over exaggerate a bit, in anticipation of what could and what they believe will happen, while women will not typically go so far.
It’s not that men are being untruthful. They are just selling based on more than numbers. They are selling based on their gut. There is no doubt in their minds what they can do, even if the numbers do not necessarily show it yet. Women on the other hand, are selling based only what they can prove based on numbers alone. They may have confidence and believe they can do much more than what the numbers show, but their focus on competence trumps that and causes them not to let the belief they will do better seep through.
Can Women Entrepreneurs Change the System?
Not overnight, no. Probably not even in a decade. However, much progress can be made in that amount of time. The increase in just the first quarter of 2019 shows that change is happening. There is a lot of change needed however. What can women do?
They can do what many are already doing. As more and more women are making it across the lines and successfully nabbing venture capital funds, they are reaching over the fence to help others up. They are investing in women entrepreneurs, and training them in how to find and win venture capital funds themselves. The following are just a few women led venture capital firms working to turn the tide.
Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.
–able
Of course, it shouldn’t be that women have to go to women to get venture capital. To really change the game, all genders need to be investing in businesses despite the gender of the founder. The facts in our world, however, lead us to believe that isn’t going to happen any time soon.
Still, women can begin to level the playing field somewhat by remembering to balance confidence with competence, and playing offense even if they are thrown into the defense.
What Does this Look Like Practically?
Knowing what the issues we can control actually are, means we can swing the pendulum in our favor by making those changes. While we do not want to lie to investors, women entrepreneurs could benefit from showing more confidence in their presentations to investors.
Also, take advantage of the training offers from those who have gone before you and found success. They can show you not only how to play the confidence game, but also how to ensure you can make a smooth transition from defense to offense, despite the approach of the investors.
How Can Women Entrepreneurs Fill the Gap in the Meantime?
Fight for the venture capital funds, but if they don’t come through, or if it isn’t enough, there are plenty of other options.
Traditional Loans
These are the common go to, and they can work well, if you have good personal credit. In fact, they are maybe the best option. That is, if it is an option that you have available. At least it may be the best option in the beginning.
The options are many, from regular secured loans to unsecured loans and lines-of-credit to SBA loans.
Secured financing offers lower interest rates. In addition, personal credit quality and revenue are not the sole determining factors for approval. Collateral can cover a multitude of sins. Some accepted types of collateral include:
– Account receivables and purchase orders
– 401k, IRA, stocks, and bonds
– Inventory
– Equipment
Of course, if you’re trying to start a business, you are likely only going to have personal assets to put up for collateral, not inventory or equipment.
Unsecured Financing
Generally speaking, unsecured financing is a valid option for amounts up to $150,000. You can get an approval if you have decent personal credit, and get 0% introductory rates for 6-18 months even as a startup.
The Small Business Administration
The SBA Express is an option for women entrepreneurs in the startup phase. You can get approved for a loan up to $350,000. Rates of 4.5-6.5% are standard, and generally a line-of-credit good for 7 years. No collateral is needed for up to $25,000. There is a turnaround in 36 hours.
You can also access information, help, and support with the SBA’s Women’s Business Centers.
Grants
Grants are also a potential source of funding for women entrepreneurs, and they work well when combined with venture capital funds. A couple of popular ones include:
Amber Grants
$1,000 to a different women-owned business each month. At the end of the year, one of the monthly grant winners gets $10,000 more. See: https://ambergrantsforwomen.com/get-an-amber-grant/.
Eileen Fisher Women-Owned Business Grants
Up to $100,000 is awarded to ten women-owned businesses per year. NOTE: this program is was on pause until the middle of 2019. See: https://www.eileenfisher.com/grant-program-guidelines/ for more information.
Life after the Venture
What happens after you are up and running? Regardless of whether you snagged venture capital at the beginning, you will need to finance your business going forward. It really is best to do this with business credit rather than your personal credit. Business credit, in case you didn’t know, is credit in the name of your business that is not associated with your personal FICO. It doesn’t just happen however. You have to build business credit intentionally. Here’s how.
Separate Your Business from Yourself
Distinguish yourself from your small business. This means you can help your cause by incorporating or becoming a limited liability company (LLC). This is a distinct entity from the owner. You also will need an EIN from the IRS. That is an identifying number for your business, so you do not have to use your SSN when you apply for credit.
In addition, you will need a DUNS number from DUN and Bradstreet, a dedicated business telephone number, and a profession website and email address. The phone number needs to be toll free, and the email address needs to have the same URL as the website. A free email service will not suffice in this case.
Do Business with Starter Vendors
These are vendors that will offer net terms on invoices without a credit check. If you do business with them in your business name and not your personal name, when they report these payments to the credit reporting agencies, they will be reporting in your business name. This is how you can begin to build business credit. These vendors are said to be in the vendor credit tier.
Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.
Work Up to the Retail Credit Tier
Once there are 5 to 8 or more vendor credit tier accounts reporting to at least one of the business credit reporting agencies, you can move on to the retail credit tier. These are businesses like Office Depot and Staples.
Move on Up to the Fleet Credit Tier
Are there 8 to 10 accounts reporting? Then progress to the fleet credit tier. These include businesses such as BP and Conoco. Use this credit to purchase fuel, and to fix, and maintain vehicles.
Take the Leap to the Cash Credit Tier
Have you been responsibly handling the credit you’ve gotten up to this point? Then move to the cash credit tier. These are companies like Visa and MasterCard.
For cards in each of these tiers be sure you only use your SSN and birthdate for identity verification. Do not include them for credit checking purposes.
What’s the Verdict? Can Women Entrepreneurs Change a Sexists System?
I think it depends on the approach taken. You can’t change the mind of every sexist male in the world. There is a slow movement toward something better however. If women continue to break into the venture capital scene on the investment side, there is a real chance. If those that have broken through continue to train those coming behind them, and more women jump into the game both in their own firms and in joining firms with males, the ball is rolling in the right direction. With the understanding that women need to increase confidence and switch to offense when cornered into defense, the future looks bright for women entrepreneurs and venture capital.
In the meantime, all businesses, whether female owned or not, need to work on building business credit. This is the key to finding continual funding throughout the life of a business.
There will always be those with a sexist mindset, but if these things can continue to happen, we can likely continue to see the large annual increases in the amount of venture capital funds women entrepreneurs receive.
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