If you’re a woman in the process of starting a new business, you’re in good company. The number of businesses owned by women in the U.S. is growing. In 2014, there were over nine million women-owned businesses, employing over seven million people and generating over 1.4 trillion dollars. For inspiration, check out this list of top women entrepreneurs.
This is great news, because it means women have the opportunity to pursue their dreams, support their families, and contribute to the positive growth of our economy – all on their own terms. If you’re in the process of getting started with a business of your own – whether you’re just bouncing ideas around or you have a firm business plan drafted – here are some quick tips on how to finance your new business.
Financing options and lending partners
It’s important to think through what kind of financing you’re going to need, both now and in the future as your business grows. Sometimes starting a business doesn’t require much money, and people can afford to finance it themselves.
But often, more money is needed to get off the ground and running. If you’ve thought it through and know you’re going to need a loan, consider what types of financing exist. A few examples include:
• Asset-based lending
• Account receivable lending
• Business Line of Credit
• Term Loans
• Traditional bank financing
The Small Business Administration (SBA) also provides some excellent resources to help women launch businesses, grow their existing business, and compete in the global marketplace.
Before meeting with potential lenders, have the following prepared:
– Business Plan: Having a firm grasp on what your company goals are, and precisely how you’ll reach them is critically important. Your business plan should outline these details, and will provide potential lenders with a thorough understanding of how you intend to run your business. Most importantly, preparing a good business plan provides you with an opportunity to demonstrate your professionalism, attention to detail, and ability to plan – all of which are important to potential lenders.
– Financial Documents: Once you’re moving forward and meeting with a potential lender for a loan, start prepping. Make sure all of your financial information is organized correctly and efficiently. Having the proper reports will help your lender understand your plans for the funding, how you plan to grow, and how you will eventually pay the loan back.
For more on what documents you will need and questions you might be asked, check out this previous post on our blog.
– Answers to FAQ’s: Be ready for questions the lender might ask you. From “Does the business control its inventory?” to “What is the future of the industry,” – have the answers ready. In order to prepare for this, share your business plan with a few colleagues and find out what questions they have. Chances are, they will be some of the same questions that a lender will be curious about as well.
We work with women to fund small-to-medium sized businesses and are experts in this area. If you have questions, or would like more personal advice on how to finance your business, give us a call today!