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Small Business Loans for WomenWomen are no longer the weaker sex as they have matched the skills of men in almost every sphere of life. Business, which was once the exclusive domain of men, has been pervaded by women to the extent that between 1992 and 1997 the growth of women-owned businesses was nearly three times as much as the increase of all other business enterprises. In 1997, the number of women-owned firms stood at a staggering figure of 5.4 million.Why Loans Are Needed?Home-based businesses run by women have specifically increased as women prefer the convenience of looking after their children and homes in addition to running a business for earning that much-needed money. Loans for running such businesses are, therefore, essential as women are as successful as men. Women are also very adept at buying existing businesses and running them successfully, necessitating loans which can be for a variety of purposes including buying and running a business, expansions, buying special equipments needed, maintaining sufficient inventory or for retail trade.How Small Business Administration Helps?If women are unsuccessful in obtaining loans from conventional sources, the US Small Business Administration (SBA) guarantees small business loans on reasonable and convenient terms to women entrepreneurs. These loans can be used for any of the purposes mentioned above. If a lending institution does not feel confident about granting a small business loan to a particular applicant, it can approach SBA for a loan guarantee which means that if the loan recipient falters in repaying the loan the SBA will reimburse the lender.Criteria for Getting SBA Loan GuaranteeThe criteria are: historical financial statements and projections should be provided to prove that the business can repay the loan; the ability to incur more debt should be exhibited; some form of collateral should be provided although it might not cover the full extent of the loan; a good personal credit report is essential and if it is tainted there should be enough evidence that determined efforts were made to rectify the problem; the small business and its owner should have fulfilled all their tax obligations; there should be no attempt to get any loan from other sources; the loan request must demonstrate that loan could not be obtained elsewhere and that the loan will substantially benefit the business; and it must be established that the personal resources of the business owners are not adequate to cover the loan amount needed.There are many sources available online software that can help the applicants in preparing all the documentation and related services. The tremendous growth of women-owned firms is evident from the 1997 Economic Census which stated that such firms constituted 26% of the nation's 20.8 million non-farm businesses and employed 7% of the 103 million workers. The growth rate has increased considerably since then and it is expected to go up even further over the years to come. Keeping in view the high economic and employment potential, it is apparent that business loans for women are a dire necessity and they should be encouraged by all concerned.
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