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BizReport : Ecommerce : April 14, 2017

Expert: The best financing options for female SMB owners

Finding the right financing - from grants to loans to investors - is hard for every entrepreneur, but it can be more difficult for women than men, according to recent data. Our expert identifies some of the best funding opportunities for female entrepreneurs.

by Kristina Knight

Kristina: How can female entrepreneurs do a better job of looking at investment opportunities for their businesses?

Sara Oberst, VP of Marketing, Manta: While women entrepreneurs still have hurdles to clear when it comes to obtaining funding, there are plenty of ways the funding community can alleviate the gap. Women founders need to be bold and resilient when seeking out VC by exploring all possible options. Go outside traditional lenders to friends and family, women's professional and industry groups, and policy makers to ensure you are considering all your options. In tandem with leveraging some of the resources previously mentioned, women should approach investor meetings with a firm confident attitude-all founders must be able to confidently articulate their business models in order to earn the ear of potential investors.

Kristina: Are grants a good option?

Sara: Grants are definitely worth pursuing. Any loan that allots funds without repayment terms or a divestment of business equity is ideal for small businesses. That said, grants are highly competitive meaning the likelihood of receiving one can be low.
While grants are a great option to consider, and a major win should small business owners secure them, they shouldn't be the sole source of funding for a woman-owned small business due to unpredictable outcomes.

Kristina: What about micro-financing/micro-loans?

Sara: Microfinancing and microloans are great options for women small business owners mostly because of their low interest rates. Low interest rate loans are an appealing option for female business owners since there's typically a longer timeline for repayment, preventing the accumulation of crippling interest. Another benefit of taking the microfinancing route is lack of being tied to the strict repayment options often associated with larger loans. Since microloans are usually valued under $50,000 to begin with, they are ideal options for women looking for decent funding to jumpstart their small business. Just be careful and do research before entering into a loan agreement. There is a broad spectrum of "microlenders," as this term has been cooped as a marketing tactic, and some companies offering micro-laons can have terms resembling payday loans.

Tags: female SMB owners, Manta, SMB financing, SMB tips, SMB trends

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