Finance Your Small Business

Not sure how to pay for your dream? Here are a few options.

Many women dream of starting their own businesses and gaining more control over their lives. And increasing numbers are now making that dream a reality. Women are starting businesses at twice the rate of men in this country and have been for more than a decade, according to the Center for Women’s Business Research.

So you’ve got the dream (and maybe even the plan), but where do you get the money? The CFWBR reports 56 percent of women owners of firms with $1 million or more in revenue are likely to use commercial credit for capital; 71 percent of men are. Women and men are equally likely to use business earnings for capital.

Check out these options and resources to find funding for your dream:

Sources of Cash
From “Success by the Book”

Savings

pros: easy access; low cost

cons: no outside check on your plans

Credit Cards
pros: easy access

cons: potentially very costly because of high interest rates

Home Equity
pros: easy access

cons: if business fails, your home is at risk

Friends and Family
pros: no official scrutiny; low cost; no applications
cons: if business fails, you jeopardize personal relationships and others’ finances; you also have to spend significant time educating and asking

Loans with Personal Assets as Collateral
pros: accessible

cons: if business fails, you might need to sell other assets to pay back the debt; debt is limited to your available assets

Small Business Loans
pros: require you to have a strong business plan; interest rates sometimes attractive
cons: small amounts; often require personal guarantee

Sale of Equity
 (bringing in partners or venture capitalists)

pros: potential source of significant capital; no interest expense

cons: giving away the future profits to others; likely loss of some control over your company

Resources
Angel Capital Education Foundation

A charitable organization devoted to education of angel investors and to collecting and disseminating data and information on angel investors and angel investing groups.

Business Finance.com
Allows you to search 4000 + business loans and capital sources.

Center for Women and Enterprise

Provides education, training, technical assistance and access to capital to ensure that all women, regardless of their economic status, will have the opportunity to start and run their own businesses (offices in Boston, Worcester and Providence, RI).

Count-Me-In
Provides $500-$10,000 loans to women entrepreneurs.

Post Idea.com

Allows you to post your business plan and then pairs you with portfolio matching investors.

Springboard Enterprises

A national non-profit organization accelerating women’s access to the equity markets.

U.S. Small Business Association
Provides loans and information to entrepreneurs and small businesses.

Women Entrepreneurs Inc.
An organization dedicated to helping women entrepreneurs succeed through networking, educational programs and advocacy.