October is National Women’s Small Business Month

Did you know women owned businesses are the fastest growing companies in the country? Women business owners now account for almost half of all self employed companies in the U.S. Not only that, but according to the National Association for the Self-Employed (NASE), women boomers are taking the stage when it comes to business ownership, with the average age of owners at 50 years old.

Women business owners are superb multi-taskers and know how to do more with less,

said NASE President Kristie L. Arslan.

We are proud to honor their yearlong contributions to the nation’s rebounding economy.

October has been designed as National Women’s Small Business month and to spread the message, both the NASE and the SBA are celebrating with new videos, a new Facebook page and bios on some of the strongest women leaders who are at the helm of some of the most successful small businesses in America.

Women and SBA

Along with business credit cards, women are using a host of financial products offered by SBA. One of the most common loan resources is the 7 (a) Loan Program offered by the Small Business Administration. Considered its primary program, it allows small business owners – both those already existing and those in the start up phase – to obtain financing. One reason this particular finance program is so popular is that it opens up financing options for those who might not qualify for traditional business loans via common lenders. This loan product allows the SBA to provide these loans through guarantees, which then frees banks and other lending institutions to make the loans with less risk.

Not only are these loans the preferred choice, but they also offer more flexibility than other traditional loans. The loans offer latitude for the business owners to use them for a number of things, such as furniture and fixtures, office equipment, land leases and purchases and even debt refinancing such as credit card debt. The maturity on these types of loan are usually more generous, too. For working capital, the terms can be extended out ten years while monies used for fixed assets qualify for a 25 year term.

These are great choices, not only for women business owners, but for any small business owner, partly because most banks in the U.S. participate in the program. Further expansion in terms of availability is found in some non-bank lenders. The banks simply agree to the SBA compliance requirements and from there, the SBA provides a guaranty on a portion of loans taken out under the program.

Access to capital has historically been a challenge for small business owners, especially since the recession began and banks began reining in their respective approvals. Currently, loan approvals without the backing of the SBA hovers around 10%. This makes it difficult for those wishing to grow their companies, but who cannot gain access to the needed funds to make it happen. Lenders will look at past earnings, cash flow and a host of other data to determine risk and often, a small business owner simply can’t provide that kind of in-depth information, either because it doesn’t meet the tough demands or the business hasn’t been in place long enough for patterns to emerge. The SBA eliminates these problems in many instances.

SBA Advice

The SBA also offers the following advice for small business owners:

The leaner the business, the better the profits. Small businesses have the best chance of success if they know how to staff their companies and recognize slow periods during the year and then plan accordingly. Not only that, but staying lean also means keeping credit card balances low, making on time payments to vendors and lenders and learning how to recognize potential problem areas, especially in their finances.

Also, for those businesses that are just starting, better cash flow is always a challenge. These business owners are encouraged to pay invoices via cash instead of credit. Often, discounts can be had for those types of transactions as well as though that are paid up front. The most successful small business owners understand the first line of credit or credit card isn’t necessarily the best choice. These professionals know how to comparison shop for better APR and loan rates. Even when the SBA backs a business owner, it doesn’t eliminate the need to shop around for the best deals. It can only help them in the long run.

Finally, the SBA encourages business owners to remain assertive as they attempt to collect on invoices. It’s about consistency and once a business owner has established himself with invoices that come like clockwork and collection efforts that are professional and ethical, he will find his clients will respond with the same respect and attention to detail.

Are you a woman with a small business? Share your story with us. We’d like to hear how you make your business work and grow. What’s worked best for you? What efforts have you made that you abandoned for a better way?

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