Small Business Administration Loans for Women
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Women looking to obtain funding for their small business would be wise to check out the U.S. Small Business Administration (SBA) as a source of loans. That is particularly the case if they are having trouble obtaining funding through traditional lending channels.
According to the SBA website, during 2009, the SBA was involved with over 11,000 loans to female business owners, totaling over $2 billion. And nearly 20 percent of the lending done to small businesses by the SBA as a result of the Economic Recovery Act, went to businesses owned by women.
Small Administration Loan Basics
The SBA is a federal agency whose job is to offer assistance to small businesses. Some of the services the SBA provides are financial in nature, including help with loans and grants.
The SBA does not provide loans directly, but provides loan guarantees to banks and other lending institutions, which in turn provide loans to small business owners.
Reasons to Get an SBA Loan
SBA loans are designed for small business owners -- including women owners -- who can't obtain funding with reasonable terms elsewhere. For this group of business owners, the SBA provides a guarantee that makes loans available from third party lenders, when a business owner might otherwise not have qualified.
The SBA also offers counseling and guidance that makes walking through the small business funding process easier for some.
Where to Find Small Business Administration Loans for Women
The SBA website provides a search tool that allows business owners to search for loans that meet their specifications. One of the options allows you to look for financing specifically available to women owners.
The SBA also has an Office of Women's Business Ownership, which operates a number of Women Business Centers throughout the U.S. and its territories. Part of the mission of these centers is to counsel women on the financial resources available to them through the SBA, including loans.
Documents You'll Need
Once you have identified a lender who works with the SBA, you will work directly with that lender to make your application. The SBA recommends you have the following documents on hand when you apply for your loan:
- SBA loan application
- Personal background statement
- Personal financial statement
- Business financial statements
- Projected financial statements
- List of applicant's other ownership and affiliations
- Business certificate or license
- Loan application history
- Business income tax returns
- Personal income tax returns
- Applicant's resume
- Business overview and history
- Business lease
Additional documentation will be needed if you are purchasing an existing business:
- Current balance sheet and profit & loss statement of the business
- Two years of prior federal income tax returns of the business
- Proposed bill of sale and terms of sale
- Asking price with the following schedules:
- Inventory
- Machinery and equipment
- Furniture and fixtures
SBA Loans and Your Credit Score
Since SBA loans are actually issued by third party lenders, credit score requirements will vary. The bank or other institution making the loan will determine your credit worthiness based on its own criteria.
As with any loan, the higher your credit score, the stronger your case for acquiring the loan.
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