If you’re a business owner, then you certainly understand that you need to have money to make money. It can be even more challenging for women entrepreneurs to getting the funding they need to run their business.
According to recent studies, men receive higher financing and loan approval rates than women. In fact, the average business loan for men is just over $100,000, whereas it’s less than $60,000 for women. Why is this? Studies also show that women entrepreneurs also have lower credit scores and lower track records than men. Thankfully there are small business loans for women that have bad credit and possibly some other issues that create barriers to funding.
Below is some information that women entrepreneurs can use to improve their chances of getting the funding they need to run their business.
Monitor and Improve Your Credit Score
Your personal credit is a good indicator of your creditworthiness and your ability to manage your overall finances on a personal level. If your personal finances are poor, most lenders will think you’ll likely follow suit with the way you run your business as well.
Learn What’s Impacting Your Credit Score
It’s important to know what’s impacting your credit score that you might not be aware of, such as your:
- Payment history, which indicates whether you pay your bills on time. Credit utilization rate, which indicates how much of your available credit is being used.
- Overall credit history, which is an indicator of what kind of credit you have and for how long.
This sort of business information is also used in the same way for business credit.
What Business Loans Are Available for Women Entrepreneurs With Bad Credit
Since most traditional banking institutions shy away from making loans to women with bad credit, alternative lenders are available. They have more relaxed standards than traditional lenders and based their evaluations on factors beyond just credit scores.
How Do I Know If I’m Eligible for a Business Loan?
In most cases women who have been in business for over a year, have generated annual sales of at least $100,000, and can provide at least three months of their bank statements is normally what alternative lenders look for when qualifying women entrepreneurs for financing.
Please contact Prime Wealth Development to learn more about alternative funding.