While the business world for black women entrepreneurs has come leaps and bounds in recent years, women in general, and particularly women of color, can still face a statistical struggle when it comes to finding funding for small businesses.
According to the Federal Reserve, when comparing funding opportunities for similar businesses run by women to those that are run by men, there’s evidence that women are at an unfair disadvantage. To offset this there are resources and grants exclusive to black female business owners. Nevertheless though, black women business owners deserve equal opportunity and while there are protections in place to ensure they get it, there can still be a gap here. At mySMBscore we are committed to helping all business owners, regardless of race or gender, make better business decisions when it comes to loans. Before we dive into all that business owners can access through our platform, let’s take a look at a few different types of business loans available for black women entrepreneurs.
SBA loans are partially backed by the Small Business Administration and designed to help small businesses thrive. As a staple to the economy, the government wants to help small businesses overcome some of the challenges they face. To get an SBA loan you’ll need to work with an SBA-approved lender. There are a variety of SBA loan types, so you’ll need to determine which to pursue should you choose to pursue an SBA loan.
To qualify for an SBA loan program, you typically will need to already have an established business in good financial health and a good business credit score.
Traditional banks can offer business loans, as can credit unions that offer business loan products. These loans can be worth exploring, but requirements may be more strict compared to online lenders.
Online business lenders are known for being a bit more forgiving compared to other options. Plus, since they operate online you can expect a more streamlined process and often faster funding. To top it all off, due to the competitive nature of the internet, online lenders can offer competitive loan offers, and have to in order to win your business. At mySMBscore, black female business owners can unlock their business SMB (small-medium sized business) credit score along with valuable insights. With access to this information, business owners can identify ways to improve their chance of qualifying for a business loan. Furthermore, this can help black female business owners prove they are a well qualified candidate, which could be the confidence they need. When ready, business owners can also access personalized business loan offers at mySMBscore.
While eligibility requirements for small business loans for black women can vary by funding model, there are some general requirements you can expect to see in many lender’s criteria. Eligibility requirements can vary depending on the type of loan, lender, loan amount, and other factors, but can include the following:
To better understand how you stand through the eyes of a lender, visit mySMBscore. We can help business owners identify any areas of improvement that can help them meet the requirements necessary to qualify for a business loan.
MySMBScore can not only give you valuable insight into your business credit standing, but you can also get personalized offers within minutes. While the network of online lenders is big, you’ll want to prioritize your safety and security of your information. By utilizing our platform you can access top online lenders that are legitimate. You can also use the internet to find local banks and credit unions that offer small business loans. The powerful community of black female business owners may be able to offer up trusted referrals as well of lenders that treated them with respect and integrity while prioritizing the success of their business.
Aside from your personal and business credit scores, lenders will likely want to know how long you’ve been in business, what your annual revenue looks like, and if you have any collateral in the event you default on your loan. Lenders may also take into consideration the industry your business operates in, and if that adds any risk factors to your application.
All of the above mentioned factors combined, along with the type of loan, can heavily influence the interest rates of small business loans for black women. It is important to do what you can to get your personal and business credit scores up before beginning your loan application process in order to get a lower interest rate. As you compare offers keep in mind that the repayment period, loan amount, and type of loan can impact the interest rate returned. Interest rate should be a top priority when comparing loan offers, but don’t forget to consider total loan costs as well.
Approval and funding times can vary. Check with the lender of your choice in regard to funding timelines so you know what to expect. Typically, online lenders offer faster approvals and funding times. To return offers in a matter of minutes, visit mySMBscore.
The amount of funding black women could potentially borrow through a small business loan can vary significantly depending on several factors.
When speaking broadly, borrowing limits could fall anywhere in the $1,000-$5,000,000 range,
MySMBScore can connect you with lenders that can offer small business loans for black women entrepreneurs of up to $100,000. Plus, we can help business owners understand what they need to do to return more competitive offers.
Repayment periods can vary drastically, with some offering repayment periods up to 30 years. If you need access to funds on an ongoing basis, consider a business line of credit. When it comes to term loans, longer repayment periods can reduce the monthly payment but can also increase the total loan costs. Consider all options carefully before making a decision.
Small business loans for black women entrepreneurs can facilitate financial empowerment. Small business loans can help black women compete in today's cutthroat business world and overcome those small business growing pains. The biggest benefit of a small business loan is the opportunity to grow your business. Dream big and let mySMBscore make your business dreams a reality.
There are so many ways black women entrepreneurs can utilize funding to grow their businesses. Some common fund allocations are:
The possibilities are endless, especially if there are no spending restrictions on the loan. In most cases, small business loan funds can be spent on anything that contributes to the growth of your business.
Applying for small business loans online offers potential time savings and convenience. Black women entrepreneurs have access to a variety of lenders, at the click of a button. Check offers now online at mySMBscore.
In addition to traditional and online lending, black women entrepreneurs can access special resources and programs to find small business loans. The National Black Women's Business Council (NBWBC) and other similar resources can help black women entrepreneurs with education, mentorship, and locating the capital to grow their businesses.
In addition to funding through small business loans, that capital can be funded through the several business grants that are available for black business women. These grants can often have short windows for applicants and often have low funding amounts, but it certainly doesn’t hurt to throw your black-owned business’s name in the hat. Black women entrepreneurs can find a list of available business grants at Grants.gov.
In order for black women entrepreneurs to prepare their businesses for small business loan applications, it is extremely beneficial for them to see their SMB score through the eyes of a lender.
Black women entrepreneurs can build their credit scores (both personal and business credit score) and ultimately improve their chances of qualifying for a small business loan by continuing to make any pre-existing payments on time.
MySMBScore offers credit memos that give you a comprehensive understanding of your business's key financial metrics and identifies areas for improvement - making it easy to determine what steps you can take to propel your business.
Of course, when making decisions for your black woman owned business, all things must be considered. By making sure your business is financially healthy enough to take on monthly installments or interest payments, you mitigate the risk of defaulting on your loan and winding up in a potentially disastrous situation.
Growing your black-owned business can be difficult, but propelling forward anyway is a huge power move. Whether the business world has been easy on you or not, you hold the power to make your own way and redefine what success looks like for black women entrepreneurs everywhere.