Business loans for women

Business loans for women come in all shapes and sizes. Some finance may be obtained without security, whilst others may require the borrower to provide sufficient collateral or at least a personal guarantee.

Popular forms of business finance for women:

Startup loans

If you’re launching a new business, you may be eligible for a startup loan – this is seed funding to get a new venture up and running. As well as private lenders, Government funds are also available for this type of loan. Security may be required.

Working capital loans

Working capital loans pay for expenses like wages, fuel bills, stock and raw materials and more. In some cases, added security may be required.  

Working capital loans for female business owners include:

• Small business loans

Works like a traditional bank loan. Borrow from ₦1,000 to ₦500,000. Repay the loan in a few months or over several years. Security may or may not be required.

•  Invoice finance 

Stop waiting 30, 60, 90 days or more for customers to pay their bills. Receive the cash tied up in your outstanding invoices as soon as you raise them. You retain control of your sales ledger. Clients need never know you are using your invoices to raise funds. No added security required.

• Revolving line of credit 

Works like a standard bank overdraft. Dip into an agreed credit limit as and when you need funds, then pay the loan back as your business revenues come in. Security may be required.

• Merchant cash advance

Businesses that accept customer credit and debit cards can borrow against the value of their card sales. As your card sales increase, your borrowing limit goes up. Pay the loan back with a fixed percentage of your card sales. No added security required.

• Business credit cards 

Business credit cards work the same as personal credit cards, but are in the name of the business, not an individual. Business cards typically have a higher credit limit than personal accounts and higher interest rates than other forms of business borrowing. Security may be required. 

Loans to cover expansion costs

Cover the costs of your business expansion with a development or bridging loan.  Use the funds to pay for refurbishments and extensions to your operating premises. Borrow up to 90% of the project cost. Repay the funds over 1 – 30 years. The property acts as security for the loan.

Buying equipment such as vehicles, plant, and machinery

Vehicles and major pieces of equipment can be expensive and buying them with cash can seriously hurt your cashflow. However, asset finance can absorb the financial impact. Purchase work vehicles like cars, vans, or plant and machinery over time. Use the equipment as you pay for the equipment. In most cases, the asset acts as security for the loan.

Franchise finance

Joining a franchise can allow female entrepreneurs to become part of a well-known brand, enjoy centralised marketing support, and have fast access to products and equipment. However, buying into a major franchise group can be expensive, and few franchisors offer funding to cover the start-up costs. A franchise loan allows you borrow from ₦1,000 to ₦5million to get you on the franchise ladder. Security may be required.

Business grants

Business grants are provided by local and national government and some foundations and charities. This is effectively free money, as grants do not need to be repaid like a loan. However, there is usually stiff competition for grants, the application process can be slow and difficult, and the pool of available money is usually limited, which can restrict the amount of cash you may receive.