Today is International Women’s Day, a time to recognize all women of the world and the achievements they have made throughout history, and to acknowledge the challenges they continue to face and defy. At Green Ocean Solutions, a popular business loan office headquartered in Los Angeles, we treat all customers and clients fairly and with the respect they deserve, but we are aware of other loan offices that might not. Throughout the years, and even up to today, many female small business owners have encountered obstacles that men usually do not.
It is estimated that women own roughly 30% of all small businesses within the country. However, only about 16% of small business loans are given to these businesses. Furthermore, one study based in the United Kingdom found that banks were less likely to loan to women by a 5% compared to men, without there being any clear reasoning to distinguish why.
Beyond getting small business loans less often and for possibly-biased reasons, women also get smaller loans with higher interest rates on average. So if a woman does manage to get approved for a bank loan, despite the apparent odds stacked against her, she will receive less money but with more risk if she defaults on the loan. Seems a bit one-sided, does it not?
Loan Solutions for Women
Since many of the challenges women face in seeking a small business loan involve the banking system, it might be advantageous for a female entrepreneur to use alternatives instead. After all, banks are not the only groups and agencies that can offer a loan.
Three alternatives women who own small businesses should consider include:
- Business credit: A small business that does not anticipate needing large loans in the near future for projects and expansion might want to get a business line of credit instead. You can set these up through lending clubs to completely sidestep bank-related troubles.
- Term loans: When your small business needs a sizeable amount of money in a pinch, a term loan through a business loan office can be the right solution. Get what you need and repay the term loan over an extended period of time, helping you stay focused on your business.
- Short-term financing: For smaller loan amounts, a short-term financing option might be useful for you. You will have less time to pay off the loan than a term loan but generally get offered smaller interest amounts or require less collateral to create a secured loan.
No matter what solution you approach, the point remains that there are ways to hold your small business afloat as a woman facing challenges created by unjust biases or otherwise. As part of International Women’s Day, we encourage you to keep moving towards a progressive future for women with every step you take – and hopefully you can create a profitable business along the way as well.
For more information about small business loans, you can talk to our Los Angeles business loan office. Contact us at any time to learn about the options Green Ocean Solutions can offer you and your business – most people who are approved for a loan receive notification in only 24 hours!