More women are leaving the corporate world to become entrepreneurs. Over the past two decades, majority women-owned businesses continued to grow at about twice the rate of all firms. According to women-owned businesses Research Center for Women's Business, the number of majority increased 42% between 1997 and 2006.
One of the concerns faced by a woman business owner is finding the money to start or grow your business. While some women's businesses are funded through a small nest egg, others may use other means of financing.
Here are 5 tips on financing a business woman commissioning.
Loans from family and friends
This is one of the most common ways to finance a new business. Your family and friends are more likely to lend their money if they are convinced that your business plan and idea. Borrowing money from people you know is a cost-effective approach, as it can not be required to pay additional fees or interest. However, it could potentially lead to tensions if you can not pay the money. Some people think they are automatically entitled to a share of the business in exchange for borrowing money. Any stipulations associated with the "loan" must be put in writing to avoid future misunderstandings. Some business owners
Women are aware of the tension that can potentially arise from loans from family and friends. If you are one of them, why not ask your family or friends to help manage your business, such as taking orders, promotions, delivery and so on. Credit Cards
Small business owners use reports, several credit cards to pay expenses. This type of financing is expensive and risky. If repayments are not made may jeopardize their personal credit. If you want to use this means of financing, make sure you can pay your card before the interest kicks in.
Personal Loans Banks are usually quick to approve loans of less than $ 25,000 based on personal credit. If you need a few thousand dollars to spend on equipment or inventory, a personal loan is an ideal way of financing. The interest rate is smaller than a credit card. You still have to submit a business plan to support an application for personal loan. Commercial Loans
You will need to provide collateral or guarantee along with a business plan or financial statements when applying for a business loan. The selection process is rigorous. Commercial loans are usually available from $ 25,000 and up. If you are using the equity in your home to get a business loan, you can put your home at risk of foreclosure if you default on your monthly payments. Understanding all the details regarding this type of loan is vital to protect the ownership of your home. SBA
When a larger loan to purchase a building or an expensive piece of equipment is needed, there are programs for women business loans provided by the Small Business Administration (SBA). Note that the SBA only acts as guarantor, but does not offer loans for small businesses. SBA reviews requests for loans by borrowers. If a loan application is eligible, the SBA issues a letter of commitment on behalf of the applicant. This chart shows the arrangement of the SBA to guarantee the loan, which helps speed up the approval of a loan by a lender.
There is an inherent risk of financing business activities, no matter what type of financing you choose. The key is to not borrow too much to the extent that it can not meet the monthly payments of the income of your business.
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