What are the Best Small Business Loans for Women?
Small business industries that tend to be women-dominated are in the health, fitness, nutrition, retail, and beauty space. These industries have certainly experienced their ups and downs over the past couple of years. Some of the small businesses were able to get government support to help get through the worst of the lockdowns. Some businesses had savings and dipped into them to make it through. Most looked into business loans to enable them to make it through. Those that already had business loans may have appealed for a payment pause or holiday in their repayments.
What we know is historically it could be difficult for businesses in the industries listed above to be approved for loans, as they could be lower earners. For example, a small hairdressing business might not make as much income as a mechanic. Therefore the hairdresser could experience some difficulty getting approved for loan amounts. Although lenders don’t discriminate against female business owners, they might favor certain higher-earning industries. Many small business owners that are women may wonder what the best options are for small business loans and whether the industry they operate in may affect their loan application success.
In this article, we explore the best small business loans for women, how easy they are to apply for, and give you some tips to help your applications.
What are the best small business loans for women?
Choose and look for a lender: Nowadays it is very easy to find the right lender for the best small business for women. It is easy to view lenders on Google and other search engines and look at reviews online for the best business loan lenders for women. You will also be able to see if other borrowers experienced any problems with the lender, therefore you can avoid them. You can also find lenders that specialise in products for women, some even provide the best small business loans.
Find the loan type: Before applying for a small business loan for women it can be best to research the ones that might be suitable for you. Luckily there are many more loan products available for women these days than ever before. You can take advantage of the specialized and tailored loan solutions. Therefore finding the best small business loans for women business owners.
Small business loans for women
Small business loans for business owners, women or men, can be secured or unsecured. Secured business loans require a piece of collateral to guarantee the loan will be repaid, this could be your work vehicle, property, or a piece of equipment. Unsecured loans in comparison don’t require any assets to be used as collateral.
Unsecured loans are very easy to apply for and can be the best small business loans for women option. With either a secured or unsecured loan there will be an interest rate and a repayment period in place. With an unsecured loan, there could be flexibility in paying the loan off sooner, saving interest. Lumi has tailored its products for small business owners in all industries. Lumi understands the challenges that small business owners face. Lumi offers the first Australian Payment Pause that is completely interest-free when you pause your loan. Most other providers will continue charging interest during any pauses you may have in your repayments.
A business line of credit
Another popular option is a business line of credit, this type of loan operates in a similar way to a personal credit card. This can be a good loan solution for one of the best small business loans for women. This approach allows a business to be approved for a certain loan amount, this will then get added to your business account with the ability for you to draw down on the funds. A business may only choose to have the business line of credit in emergencies or they use it regularly. If the credit remains unused, there will be no interest accrued. A business could actually draw down on the loan, repay it and then draw down again, repeating the cycle until the loan is closed. This can be a very flexible solution for a business that experiences seasonal cash flow.
Let’s consider an example of a small business; a spray tanning business could experience more business in the Summer months. If a promotion for spray tanning products became available during Winter, they would want to make the most of it. They may find they earn slightly less during the winter due to customers not wanting to have as many spray tans. By having a business line of credit in place, they could draw down on the loan to purchase the stock, knowing they will be able to repay when their services pick up in Summer.
How to apply for the best small business loans for women?
- Have your documentation ready; You will need to have an active ABN and show that you have been operating in the same industry for more than 6 months. You will also need to provide personal identification documents and up-to-date financial statements. The lender will review your credit score. Lumi can do this automatically which helps to speed up the process. Keeping your bill repayments up to date and regular will help improve your credit score.
- Know your finances; make sure you take the time to assess what you will use the money you are borrowing for. Know how much you actually need to borrow and be sure not to over-extend the loan more than you need.
- Find the right loan type: when researching for the best small business loans for women you will come across many different options. Take the time to find the best loan for your situation.
- Look at different combinations; play around with the online calculator to work out the best loan repayment plan for you. Look at the loan length and the amount, you can even see the interest rates. The repayment amount will include the interest rates.
- Have a repayment plan; in place to be sure you can repay your loan. Lumi encourages their borrowers to pay off their loans early if they can. You could look into making more regular repayments, such as fortnightly instead of monthly.
- Clarity is key; choose a lender that is transparent and has no hidden fees. Be sure to know the exact terms of the loan you are entering into.
When you have all your documentation ready, you know the best loan option for you and the terms that you would prefer. You can apply through Lumi’s easy automated application process. Simply click here or contact one of the friendly Lumi team on 1300 005 864 Lumi. If you have any questions at all, the Lumi team is there to help you.