Like all businesses, women-owned businesses face unique challenges, and in today's economic environment, acquiring capital to operate and grow their businesses can be one of them.
Here are five key financial tips to help women entrepreneurs build their credit profiles and obtain the financing they need to grow their businesses:
Get to know your lender
Establishing a relationship with a banker is the first step to helping you get credit-ready because a banker can help identify financial solutions that meet your business needs and work with you to determine your long-term business goals. Bankers have experience working with a variety of businesses, so they can be your best resource when it comes to business financing. Once you have established a working relationship with a banker, it's important to keep them informed as your business and financing needs change.
Build a strong credit profile
Good credit is one of a business owner's most valuable assets. As more women follow the path of entrepreneurship, it's important that good personal financial habits transfer over to their businesses. When applying for financing, lenders will look beyond just the credit score to understand if your business is thriving; they'll also review your debt-to-income ratio, and whether you have a history of on-time payments.
Explore financing options
According to the National Association of Women Business Owners, the major sources of funding that women business owners rely on are personal savings, reinvested business earnings, lines of credit, equity financing and venture capital. Business owners have many financing options to consider these days. If a conventional business loan or government-guaranteed loan doesn't meet your specific needs, you may want to explore a SBA 7(a) loan. Talk with your banker about which credit option is best for your business.