The SBA is a loan system setup and supported by the US state, helping small businesses to acquire the cash they need to succeed in a demanding, challenging, and often highly competitive marketplace. The SBA loan is an acronym of Small Business Administration – and this is a loan that looks to help entrepreneurs and small startups make their first waves in the market. In this article, the focus will be on female entrepreneurs, helping you understand how the SBA loan system can help women create and develop their own firms in the 2020s.
High-Risk
In business, everything is evaluated by risk. That risk-factor is nowhere more apparent than in the loan and financing system, which directly assesses the risk that your loan might place a firm under, and calculates concurrently whether a business or an individual is worth investing in. Often, interest rates will be higher for those companies that are seen as risky – and, of course, new businesses are risky.
The problem with this system is that it puts entrepreneurs off launching risky businesses. Instead, they’ll play their business safe, ensuring that they’re able to secure loans more easily. But great businesses never play it entirely safe, and in recognition of this fact, the SBA supports the loans of high-risk businesses to encourage loan companies to finance ambitious startups from the new crop of female entrepreneurs.
High Return
In recent years, the work to flatten the income disparity between men and women – and the increased ability for women to enter and remain in the workplace throughout their lives – has generated a considerable number of female business owners. All of these business owners have entered the market with a fresh new idea and the ambition to follow it through to its most profitable conclusions.
To achieve that, these women require loans – like those shared and offered by Biz2Credit, which focuses specifically on startups and smaller firms. And these loans are supported and part-funded by the SBA, which provides confidence both in the business offered by the entrepreneur and in the entrepreneur themselves. This more straightforward access to cash – without having to worry about precipitous interest rates – is why women are being encouraged to start high-risk, high-return firms.
No Previous Experience
Some startups come off the back of serial entrepreneurs who already have access to millions of dollars to support their latest scheme. In a sense, these individuals are going it alone – and the only funding they are likely to receive is from venture capitalists and equity firms, which are aware of these entrepreneurs and their track records.
But what of those business owners who are starting out for the first time, or who have little experience in running their own business – but a great deal of experience working in the private sector? This is another reason why the SBA loan system was set up – to get inexperienced but promising entrepreneurs onto the business ladder, financing their startups towards future successes.
The SBA loan system is clearly designed to help entrepreneurs hit the heights they’re aiming for without taking out high-interest loans – as explained in the three points outlined above.
Sylvia Browder is CEO of Specialty Home Services LLC, a Home Improvement Company; a Small Business Consultant at Browder Consulting Group, a startup consultancy firm to help women with startup assistance, marketing, website and graphic design work and other support services. In addition, she has co-authored several published books; publisher of ‘Sylvia Browder’s Blog for Women Entrepreneurs’ a lifestyle blog; and publisher of ShopSpendBlack.com Business Directory & Blog platform created to help consumers find black owned businesses in a searchable format. In her spare time, she enjoys spending time with her husband of 30 years; 5 adult children and 5 grandchildren; church; friends and motorcycle riding.
