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business loans for women
Starting a business is exciting; however, running it is challenging. So, if you wish to ensure that you have enough capital to sustain urgently and planned requirements, business loans for women can help. The number of women entrepreneurs is rising significantly in the UK. This trend makes the country urgently needs to encourage these entrepreneurs with the best financial assistance possible. Now the applications of women entrepreneurs are gaining the limelight more than men as the country is trying to bring more women into business. The percentage of women entrepreneurs has increased in the UK from 17% to 32.37%, highlighting a remarkable shift. This major shift in the percentage of women entrepreneurs is mainly due to the internet. Owing to this, many moms and women are comfortable working from home. However, both operational and work-from-home women need finance for business purposes. It could be for anything from furniture, human resource, project funding, equipment purchase, etc. A good capital pot is simply impossible if the business is in the initial stage. Due to multiple loans, the credit score to suffers. However, the requirements cannot wait because of credit score limitations. Thus, guaranteed business loans in the UK help in such a situation. If you need an urgent business loan with a low credit score, these loans can help. In this, a lender provides and confirms the loan if the person has a guarantor over the loan. A guarantor can be anyone – the business partner or someone other. He must have a good credit score and revenue statistics. Or, if you do not have a guarantor, which is quite challenging to find, you can secure the loan with collateral. A collateral could be any business asset equaling the loan amount. There are other loan products that a woman entrepreneur can tap into, whether as a small startup or a good-flowing enterprise.

What are Other Business Loans for Women to Apply For?

A women entrepreneur can apply for a good range of secured and unsecured loan products according to the requirements and the loan amount. Check the business loans for women here:

1. 12-Month Business Loans

These loans are ideal for small businesses needing a minor amount to keep the business processes unobstructed. Most businesses require funding at some point in time to keep the business flowing. In this situation, 12-month loans with no credit check from direct lenders help meet short-term business funding requirements. It is an unsecured loan that can borrow up to £5000-£100,000 for any small business and spread the cost over 12 months. To get these loans, one must ensure a 3-years operating history. One can repay these loans early. Confirm the same from the lender. However, these loans may have competitive interest rates as short-term and collateral-free loans.

2. Secured Loans

As the name suggests, these loans are collateral-based and help businesses fetch a comfortable amount to meet their requirements. In opposition to unsecured and small loans, these loans are long-term loans. Lenders do not share many risks in these loans as it is secured. If the borrower fails to cover the repayments up to the deadline, the lender shares the exclusive right to claim the asset staked. If you find it difficult to make the repayments, consult an expert lender to optimize the repayments. The lender may re-schedule the repayments by evaluating the circumstances and the business loss.

3. Guaranteed Business Loans

In these loans, the lenders provide loans on the personal guarantee that the borrower may provide. The term guaranteed here implies that the loan is secured by some form of guarantee – collateral, deposit, or agreement. In precise, these loans are the easiest to qualify for and manage. It is the best loan to have for business purposes owing to the options it provides. Without business collateral, the business owners can provide a personal guarantee. It is one of the most important parts of guaranteed business loans in the UK. If the lender finds that your business does not possess many assets to secure the desired loan amount, he may tap into the personal assets. In this, the borrower signs a deed or agreement where either a person or assets pay off the remaining loan amount. The lender can rightfully recoup the losses with a personal asset or the guarantor involved. Yes, it is a sort of secured loan.

4. Invoice Finance

Invoice financing is one of the best business loans for women to tap into if one does not share many assets or credit score to get the required sum, invoice work. It is a way of borrowing against the due payments from the customers. In situations where you need to pay the employees, re-invest in business operations, or pay suppliers, invoice financing can help. Lenders provide a type of short-term loan to customers/ business owners on unpaid invoices. Invoices here act as collateral. However, lenders retain the risk by providing only a percentage of the invoices pledged. Or otherwise, it could land in a pool of defaults. Here are certain things that one should know before checking invoice financing options:
  • Invoice financing is only available to businesses with businesses as customers.
  • In invoice factoring, lenders share more domination than borrowers. The customers always know the business has leverage invoice factoring.
  • It is ideal for small or early-stage businesses.
  • With invoice factoring, the relations with clients may suffer, as the clients will always know, and non-repayment may affect things.
While choosing invoice financing, consider the interest rates and processing costs associated. These could have a long-term impact on the finances. Despite that, invoice financing comes with advantages that one cannot ignore:
  • Help raise quick cash for your business without tangible risks
  • These loans have quick turnarounds
  • It prevents businesses from staking physical assets to secure the loan
  • Help boost customer conversions and sales with quick finance

5. Merchant Cash Advance

Merchant Cash Advance is a flexible way of obtaining a minimal amount for business needs. In this, one does not make regular payments on the loan. Instead, the loan is based on credit card or debit card sales. Women entrepreneurs can use this way to maximize their benefits. When you make a sale, a fixed percentage of your sale automatically goes towards loan repayments. It implied that loan repayments are not fixed in this case. It depends entirely on the sales.

6. Working Capital Loans

A working Capital loan is an option if your business suffers a momentary loss and you need urgent funds to cover a business expense. It is ideal for seasonal businesses that do not record phenomenal sales throughout the year. If you need furniture, hire more without having good capital upfront, working capital loans can help. These loans ensure smooth business operations with the best team and infrastructure. However, the businesses must be sure of paying the loan later at the defined date to the lender.

7. Line of Credit

A line of credit may be worth considering if your business needs immediate funding but is not sure how much. In this, a business woman can borrow an amount from the given credit limit and pay interest on only the part used. It is best to go for when you wish to avoid additional interest by borrowing extra that you hardly need. The worst part is that non-repayment may affect the credit score.

Bottom Line

Women are the future of the entrepreneurial world and innovation. These are some business loans for women that one can leverage for defined purposes. Evaluate the loan term and interest rate before tapping any of these loans. There are some government grants that women entrepreneurs may check their eligibility. It is all about keeping the business functional and avoiding the cash crunch.

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