What to Consider Before Applying for Financing as a Woman Business Owner
Although all business owners should understand their financing options, we want to highlight opportunities that are available to women who are entrepreneurs. Keep reading to find out what you should consider and what your financing options are as a woman business owner.
1. Research Grant Opportunities for Women
Nothing beats free money, which is why many women entrepreneurs pursue grants that are for women-owned businesses. Although researching and applying for grants is time-consuming, the potential return is worth the investment. You can find these grants through government agencies from the local level all the way up to the federal government.
The best place to search for federal government grants is at Grants.gov. Just be sure to use the filters and keyword search tool on the side so you can quickly sort through all the options. Also, before applying for a federal grant, you’ll need to obtain a DUNS number, register with the federal government and create an account with Grants.gov.
You can also check with your state or city for economic development resources, or get in touch with one of the Women’s Business Centers sponsored by the Small Business Administration (SBA). While the services provided by each center will vary, some could might have grants for woman-owned businesses.
2. Network with Other Female Entrepreneurs
Just because you’ve made it this far on your own, doesn’t mean you can’t lean on a trusted colleague or fellow business owner for help. If you’re interested in business financing, you could benefit from reaching out to other female business owners in your network for their advice on your situation. Even better, make some time to speak with another woman business owner who has been through the same financing application process.
If you’ve scrolled through your contact list and are unsure of who to contact, don’t give up. You can browse through resources such as Forbes list of top 100 websites for women entrepreneurs. These sites provide advice on everything from marketing to technology, but you could also use them to learn about business financing for women. Regardless, don’t be afraid to rely on the knowledge of other entrepreneurs to help you make your financing-related decisions.
3. Evaluate Your Financing Needs
There’s no formula that can tell you if you need financing. Still, there are some general components to consider that can help you make your decision to apply for financing. First, you should ask yourself “if I don’t obtain financing, will my business be able to survive?” If the answer to that question is no, you’ll likely need to apply for financing. However, the kind of financing you need will depend on many factors. For example, you may need inventory financing so you can capitalize on peak selling season, or perhaps you require an equipment loan to replace broken equipment.
Of course, financing isn’t just appropriate for dire situations. In some cases, the right financing can be just the thing you need to meet your small business goals. If you think financing might be the missing piece, consider the costs of not obtaining finance. For example, if you don’t get a loan, will you have the cash to grow your business?
Ultimately, not having enough cash to purchase inventory, equipment, or other assets could actually be more expensive than the interest rate and fees you pay on a loan. Evaluate your current and future business needs, so that you can make the most responsible financial decisions.
4. Consider Certification as a Woman Owned Small Business or Woman Business Enterprise
If your business is certified as a Woman Owned Small Business (WOSB) or Woman Business Enterprise (WBE), you may have opportunities you didn’t know about. These classifications give you preferred access to government contracts, which can provide new business.
Just as important, a WBE or WOSB classification also gives you access to mentorship programs, networking opportunities, training, and more. These resources can help you understand all the unique considerations you must make for your woman-owned business before applying for financing.
As you’ve seen in this post, there are many things to consider before applying for financing. That said, don’t let all the nuances of finance overwhelm you into being overly hesitant.
If you pay close attention to your business needs and work with a lender who provides products that fit those needs, financing can quickly take your woman-owned business to new heights.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.