Four years ago, Linda Waitkus quit her job as store manager for a Bloomingdale's near Washington, D.C., to open this fabulous dog of Great Falls, a 1,800-square-foot pet with grooming services at Great Falls, Va.
When I stopped to interview her, I was impressed to discover that Waitkus, now 57, made all the rightmoves to launch a new venture, starting with a rock solid business plan. But what really impressed me was this: she has saved enough money outside his retirement account to Fund started.
Great dog began to turn a profit in its first year, and would have paid for Waitkus himself a salary. (Ihave contributed to the cause by purchasing some treats and marrowbones for my lab, Zena, when Ipopped in.)
Women have started from businesses like crazy in recent years, and at a higher rate than men,according to a report from American Express open forum. From 1997 to the year 2012, the number of women-owned firms increased 54%, a rate of 1.5 times the national average.
(More: what you will need for a small business loan)
But starting a business can be even harder for women than for men, as is explained in an article atForbes.com by Susan Coleman and Alicia Robb. The author of a new book released by KaufmannFund, A Rising Tide: financial strategies for Women-Owned firms, Coleman and Robb for businessesrun by women face obstacles that are not encountered by men.
For example, they report, women seeking financial year first to get a business off the ground gettingabout 80 percent less capital than men. This echoes what I've heard from women entrepreneurs Iknow, people have said to me that finding the money to finance their companies is the most difficult part of their launch.
With that in mind, here are eight women resources should consider if they want to raise cash for anascent business — and two to avoid at all costs:
Personal saving most of the startups, such as pet store of Waitkus, powered with a business's money.However, as I have written in the next blog post Avenue, "When it comes to money, the deck stacked against women," women tend to earn less than men, which means they often do not have a fullCabinet to exploit.
Loans from banks and credit unions here are the primary source of financing for women-owned firms.Fortunately, women are no longer more likely to be rejected for loans than men, according to research by Robb and Coleman.
If you plan to apply for a bank loan or Credit Union, I suggest you have a solid business plan, a creditprofile and score a fabulous credit (720 or higher). You may want to try a bank where you have been along-time client or one that is familiar with the field of your company. For more tips, read the nextpost, "how to get the lending business you want" by Steve Bloom, a counselor with score, a non-profitcounseling small businesses associated with the U.s. small business administration.
An SBA guaranteed loans the Bank can keep your down payment and low monthly payments. To finda bank offers one of the loans, check the local resources of the SBA's web site and the web sites for loans and grants search tool.
Investors credit lines or loans that lenders typically allow you to borrow 75-80 percent of your home'svalue, subtract the amount you still owe for mortgages. With a home equity line, you get money ineach step, instead of the whole you get with a home equity loan. The interest rate on the line of creditis usually lower than the investor on the loan, which you receive as a whole.
According to Bankrate.com, the average for a $ 30,000 credit limit investor is 4.58%; Investor loan of $30,000, it is 5.71 percent. Just be sure that you will be able to repay this type of finance — your Houseis on the line.
(More: how to get business loans women that you want)
Relatives and friends of family members and friends often lend money interest free or at a low rate of,say, 3.5 percent. Be sure to get legal advice and creates a binding contract if you want to finance your business this way. You will want to set the terms of the loan in writing to avoid any misunderstandingabout the date of repayment and interest.
Angel investors and venture capital companies the financial resources provided for money in Exchange for equity, fractional ownership. However, they are usually swamped by requests andextremely careful with their money.
Only a small proportion of women compared to men, based on the type of financing, according toColeman
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