Federal Contractor Status and State/Local Certification
To help provide a level playing field for women business owners, the government limits competition for certain contracts to businesses that participate in the women’s contracting program. According to the Small Business Administration, the federal government’s goal is to award at least five percent of all federal contracting dollars to women-owned small businesses each year.
To be eligible for the women’s contracting program, your business must:
- Be a small business (the SBA’s size standards determine whether or not your business qualifies as small).
- Be at least 51% owned and controlled by women who are U.S. citizens.
- Have women manage day-to-day operations and also make long-term decisions.
Loan options for woman-owned businesses
Although these loans are not specifically earmarked for women, they can provide the funds you need for your business.
If you qualify, the Small Business Administration’s low-cost loan programs can be your best option. SBA loans have low rates, long terms and low payments to fuel stability, growth, and savings.
There are three types of SBA loan programs available for business owners, the 7(a) Loan Program, the CDC/504 Loan Program and the Microloan Program
An SBA 7(a) loan can be used for a variety of purposes.
Working Capital: Purchase equipment, increase inventory, add marketing programs, for operating expenses to hire additional staff.
- Debt Consolidation Loans: Refinance merchant cash advances, short-term business loans, high interest business loans, daily or weekly payment loans or business credit cards.
- Commercial Real Estate: Refinance an existing commercial real estate mortgage, buy an office building or other owner-occupied commercial space.
For in-depth information about the popular SBA 7(a) loan program, visit the SmartBiz Small Business blog and review our comprehensive article: What is an SBA Loan?
This program was created to give small businesses low cost funds for expansion or modernization. Typically, up to 50% of project costs are funded by a lender backed by the SBA. CDCs (Community Development Corporations) usually fund up to 40% of the project cost. The final 10% is a cash down payment expected to come from the small business owner. A 504 SBA loan might be a good fit for small business owners interested in purchasing a commercial real estate property and if their unique business circumstances fit with the public policy goals of your local CDC. Find a CDC here.
The Microloan Program is for very small businesses, including start-ups and provides loans of up to $50,000. Requirements to qualify for a microloan can vary depending on the lender. Proceeds from an SBA Microloan can be used for most business expenses but not for paying down debt or real estate purchases.
There are plenty of non-SBA loan options available although they may have higher rates, shorter terms and larger payments.
A business line of credit allows you to borrow funds up to a limit based on your credit, typically smaller than a term loan. You only pay interest on the amount you use, and you can continue borrowing as necessary until you reach the set maximum. These loans are usually unsecured, meaning that you won’t have to provide collateral to qualify. For additional information, read this post from the SmartBiz Blog: Small Business Lines of Credit Pros and Cons.
Business credit cards are revolving lines of credit. The main distinction is that they don’t terminate once the predetermined limit is reached. They work like personal credit cards, with varying spending rewards and offers depending on the lender. Learn more here: 5 Business Credit Card Myths.
A merchant cash advance (MCA) is most often used by small businesses that accept credit and debit card sales. You receive a specific sum in advance that is repaid either by a percent deduction from daily transactions or through daily or weekly payments.
Keep in mind that MCAs often lead to extremely high annual percentage rates. Even the minimum within the range can be several times larger than term loan annual percentage rates and can reach up to well over 300%. For more info, read What You Need to Know About an MCA.
If you need funds quickly, consider applying for a bank term loan. SmartBiz currently offers term loans through its network of banks for working capital, debt refinance, and new equipment purchase, including:
- Loan amounts between $30,000 to $350,000*
- Repayment terms between 2 to 5 years
- Fixed interest rates*
- Monthly repayments
- No prepayment penalties
*Interest rate depends on loan term and the applicant’s credit and financial profile
We conduct a soft credit pull that will not affect your credit score. However, in processing your loan application, the lenders with whom we work will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and happens after your application is in the funding process and matched with a lender who is likely to fund your loan.
Women owned-business assistance
If you need help launching, running, or expanding your business, free or low-cost assistance is available.
A Women’s Business Development Center or a Small Business Development Company offers all kinds of programs and assistance for small business owners. Locate assistance centers here: Find local assistance. SCORE is also a fantastic resource, pairing entrepreneurs with seasoned business professionals. Locate your local SCORE office here.
Female entrepreneur success stories (Insert photos of owners from published business stories)
Despite the success and growth of businesses owned by women, a troubling blanket of unfairness still exists. On average, women-owned small businesses are approved for financing at a rate of only 32%, a full three-percentage points lower than approval rates for male-owned small businesses.
We love to speak with our female customers to learn about their entrepreneurial journey to successful business ownership. Read about them on the SmartBiz Small Business Blog: