Women who want to mind their own business would be well-advised to nose around as much as possible. Struggling female entrepreneurs can find help obtaining financing and other mentoring services from a host of local and national organizations.
Indeed, women starting a business are in a similar position to students looking for loans and scholarships, observes Lindsey Johnson Suddarth, CEO of Women Inc., a Sacramento, Calif., non-profit. Special business startup loan programs geared to low-income women or females in general abound, as long as a woman is able to tap the right source.
Apparently, women are doing a pretty good job at ferreting out these opportunities. The U.S. Census Bureau estimates that women now own almost 8 million firms, up from 6.4 million in 1992. And, businesses owned by women of color are growing three times faster than the overall rate of business growth in the U.S., says a recent report by the National Foundation for Women Business Owners in Washington, D.C. Illinois is fifth in the list of top states for minority women-owned firms.
Obtaining financing to start an unproved enterprise is one of the biggest hurdles entrepreneurs face, regardless of their gender. Women who want to launch a home-based or service-oriented enterprise that doesn’t involve hard assets that a banker can easily put a value on as collateral may need special help convincing a lender, notes Amy Millman, executive director of the National Women’s Business Council in Washington, D.C. Here is a sampling of places where women may find the boost their business needs:
– The Women’s Business Development Center (312-853-3477) has proven so successful at helping Chicago-area women launch their own firms that other organizations around the country are offering the same services this center offers, says Millman.
Workshops and one-on-one counseling on how to develop a sound business plan are available to all area women, regardless of their income, notes Jaribu Kitwana, associate director and finance counselor. However, the center does charge a sliding scale fee for workshops based on a woman’s income, she notes. Individual counseling is available free of charge to all women. “We serve women throughout the Chicago area, and even some in downstate Illinois,” says Kitwana.
Once a woman has developed a sound business plan, a counselor can suggest a financing source to her that fits her situation. For instance, “microloans” of $15,000 or less are offered by a variety of municipalities, community-based organizations, lending companies and non-profits. A woman may qualify for a microloan if she plans to establish a business within a certain geographic area or if her income falls under certain limits.
– The National Association of Women Business Owners (312-322-0990) charges $250 annually for a membership in both the Chicago chapter and the national organization. The Chicago chapter, now totaling some 600 members, conducts workshops and seminars. Two years ago, the local chapter also introduced a member capital development committee composed of accountants, bankers and other professionals. The committee guides members on how to present a loan request and which sources to tap.
– The Women’s Self-Employment Project (312-606-8255) offers 12-week training classes covering such subjects as pricing, marketing and bookkeeping for low- and moderate-income women. The training costs about $150, notes Raymond Tuckett, vice president of finance. Women who successfully complete training can also secure financing in amounts as low as $200 up to $25,000, Tuckett said.
– The Cosmopolitan Chamber of Commerce (312-786-0212) helps women prepare a business plan in order to secure a Small Business Administration loan. This chamber also helps minority- and women-owned contracting firms package loan requests to the Chicago Deptartment of Housing, whereby such firms can petition for a loan in the amount of 20 percent of a potential contract. That keeps these firms from being deterred from bidding on a construction project because of a lack of funds, notes Ray Agbabiaka, director of programs.
– The U.S. Small Business Administration (SBA) has a “Women’s Prequalification Pilot Loan Program” that allows any business that’s at least 51 percent owned, operated and managed by women to work with a non-profit organization–in Chicago, it’s the Women’s Business Development Center and the Cosmopolitan Chamber of Commerce–to prepare a prequalification loan application. The SBA then reviews the loan request, which can be up to $250,000, within three working days. If the SBA approves the application, the agency issues a prequalification letter that the woman can take to a SBA lender. For more information on this and other SBA programs geared to women, see the agency’s Web site at http://www.sba.gov; then click “great business hotlines” and then “women in business.”
– Special loan programs geared toward women business owners’ needs are increasing, notes Wendy Posnock-Woock, of Acceptance Corp. Inc., a Lisle firm that specializes in securing loans for female-owned businesses. For instance, some lenders will now extend money based on a business’ receivables, or bills to clients and customers. Service businesses that have receivables, but not other types of collateral, are often owned by women.
What’s more, many banks are conducting seminars for women business people. “We are trying to do more outreach,” notes Chuck Ponicki, manager of the small business group for First National Bank of Chicago. While Ponicki stresses that a banker will look at the strength of a business regardless of an owner’s gender, seminars are helpful.
– Women Inc. (800-930-3993) charges women business owners and those interested in establishing themselves $29 for an annual membership. Members receive discounts on office supplies and other business products and have access to health insurance and legal services. The association will also coach women over the phone on how to prepare business plans and loan applications. It will also steer them to lending sources. “We have relationships with microlenders all the way through to venture capital firms,” says Suddarth.
– The SBA is establishing an on-line database so that small businesses, especially women-owned businesses, can attract individual investors or “angels.” Called ACE-Net, that database is “like a dating service between business and those who want to identify viable investment opportunities,” says Millman. More information about the service is available on two Internet sites: http://ace-net.unh.edu and www.sba.gov.
