On a recent trip visiting my parents, I learned some interesting things about my grandmother.
There were a couple of ways my grandmother made extra money. One of those ways was using her talent as a seamstress. Every one loved her work. People would have her make them all types of garments.
I vividly remember my grandmother’s house. I often wondered why she didn’t buy the property next to her, and on this visit, I found out why. She did in fact want to buy the property but my grandfather dragged his feet and the next thing she knew, the property was purchased by someone else.
I asked my mother why she didn’t buy the property herself. Her response? “In those days women weren’t allowed to buy property?” I have to admit my mouth dropped open. We tend to forget how far women have really come.
Things were very different for women. We’ve come a long way, but we still have more advancements to make.
Recently, I’ve been reading articles about women having problems getting loans to start a business. Depending on the type of business, you can start it on a shoe string budget. Then there are those that need funding. When that’s the case what do you do?
I think back to some of the Shark Tank episodes. People mortgaged their houses, took their 401Ks, and figured out ways to get capital.
Why is it so hard for women to get loans to start a business?
Here are six reasons:
1) Banks have historically held back from giving loans to women.
2) It appears that if women looked too young, they were considered a risk.
3) Women don’t appear to be as creditworthy as men. When credit scores were reviewed women’s scores were about 20 points lower.
4) According to Maria Coyne, head of small business banking at KeyBank, another reason is, “Women don’t ask, ‘what do I need to do to get ready to borrow?’”
5) Not having enough cash flow and revenue is another problem for women-owned businesses according to Lisa Stevens head of small business banking at Wells Fargo & Co.
6) Being organized and having all the proper paperwork is another problem. When you are looking to procure a loan you need to be able to explain in detail why you need the loan and what it will be used for.
Be confident and aggressive in getting your loans. If you appear to doubt your business, that will come across in your actions and attitude when trying to get a loan. If you don’t believe in your business the lender won’t either.
You might need to get creative with ways to fund your business. I have a client who went through her closet and started selling designer clothes so she could get the start up money she needed.
As I mentioned earlier businesses are different when it comes to necessary capital to get up and running. One big mistake I’ve seen many budding entrepreneurs make is buying brand new computers, desks, chairs, etc. It’s exciting to start a business. You want everything to be perfect. The reality is, a new desk, chair or computer is not going to get you into business. Start with what you already have to get your business up and running. That’s what I did, and it’s worked for me with every business that I’ve started.
To set yourself up for success in getting a loan, remember to have the the necessary documentation. Be prepared to give a detailed explanation. Show confidence in yourself and your business.
Below is an interesting infographic I made of various statistics you might find interesting.
How did you fund your business?
Toni Nelson
Using a step by step approach, Toni Nelson has been helping entrepreneurs and service-based businesses plan, brand, and promote so they can boost profitability and productivity. As the author of Sexy, Savvy and Successful, she knows how to help clients plan their strategies for success. As an award-winning photographer and videographer, Toni is in the perfect position to help clients with the branding process. As a business success coach, Toni's second book, The Secret Equation To Attracting More Clients, is all about promoting businesses. As the founder of the Entrepreneur Hub Club, Toni encourages women to invest in themselves by gaining or sharpening their business skills. As an award winning videographer and photographer, Toni has had weddings published in such places as DIY Bride and Kiss My Tulle. In 2014, Toni was a winner in the Start Up Nation Top 100 Home Based Business ranking in the top 10 for most innovative.
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