With the economy improving and posting steady employment numbers, researchers are taking another look at gender gaps in business, particularly in regard to business loans for women.
The wage gap prevalent between men and women has long been discussed and heralded as an issue of equality, but it’s not just female employees who may be short-changed, as women-owned businesses also have tougher times accessing adequate loans from financial institutions in comparison to their male counterparts, according to statistics recently reported on by CNBC.
One of the reasons for the disparity is that female business owners on average have credit scores 15 points lower than male owners. As a result, lending institutions are more hesitant to offer loans. In 2014, the average loan approval rate for women was 15.3 percent compared to 21.5 percent for men.
Though the numbers have actually gotten modestly better year over year since 2014, there is still room for improvement in the form of tailored lending solutions for women-owned businesses. The lending gap in the past year closed nearly 30 percent, indicating women are improving the financial positions of their businesses while accessing other forms of capital they need to expand.
To aid female business owners in their quests to attain credit, faster, personalized lending options could be the key. Here’s how quick credit can help women-owned businesses:
Business loans should never be seen as a one-size-fits-all approach to business needs. That’s why smaller and faster advances are more useful. To stay ahead in an increasingly competitive environment, companies must stay lean and efficient at all times. Having high expenses and debt obligations ties down too much working capital and leaves owners with little room to make improvements to their businesses.
A quick, convenient loan can free up this capital and allow businesses to implement new strategies, improve their services and compete at a higher level with both male- and female-run firms. The key is to have an adequate loan amount with favorable terms.
Cover immediate costs
As opposed to traditional bank loans, businesses also need quick influxes of cash to cover monthly expenses and new purchases. Because larger loans typically come with longer repayment periods and stricter lending criteria, it’s not always worth it to put in the time and money to apply for a loan, especially if the chances of approval are slim. Further, lengthy approval processes aren’t aligned with the real-world needs that female business owners face on a routine basis. When increased funding is needed, it’s required as quickly possible, not at some future date that’s yet to be determined.
Fast credit lending makes it easier for companies to continue forward with their original business plans without having to stall expansion processes or delay the purchase of new equipment.
Working with National Funding
Alternative lenders can be a great resource to access capital quickly. At National Funding, women-owned businesses can take advantage of a fast one-page application process that makes it easier and more convenient to fill out the loan request. Plus, with credit scores that are typically lower than men, women may be wary they don’t have enough assets, capital and lending history to be approved for a loan. However, National Funding does not require any collateral or payment upfront at all, which is an especially pertinent and business-friendly means to provide alternative business financing to those who need it.
With this straightforward process, there are no deceptive tricks or hidden charges, and female business owners may be able to access capital in less than 24 hours.
Contact National Funding for small business financing solutions.