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Can Unemployed Women In UK Start New Venture With Financing

by Jasminewatson998
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Unemployed female students and emerging women entrepreneurs can start new ventures in the UK! Funding won’t be a significant issue as they can count on business financing. There are several available loans for women in the lands of the UK — all you need is to choose the best one for you.

Types of loan available for women entrepreneurs

It is believed that the women in the UK are bright, shrewd, and innovative in the true sense. They are ready to accept all types of challenges thrown at them, which is a most-searched nature in entrepreneurs. Therefore, there’s no way they will suffer for funding.

Online UK lenders offer various types of business loans for unemployed women. Let’s list them down for your easy perusal-

  • Secured Business Loans

It is one type of business loans for the unemployed, backed by an asset like your car, equipment, office space, etc. If you fail to repay the loan amount within the due date, the lender will have the right to seize your asset as payment.

These loans are considered less risky for lenders. Therefore, these are easier to avail and come at a lower interest rate. Find here more pros and cons of secured business loans.

Benefits of secured business loan

  1. Lower interest rates
  2. Longer repayment terms
  3. Easier to obtain if experienced
  4. Higher disbursal amount
  5. No restriction on the usage of funds
  6. Wider loan range
  7. Collateral makes it more convenient to get the loan

Drawbacks of secured business loan

  1. Requires acceptable securing asset
  2. If you default, you’ll likely lose the asset
  3. Your business needs to be an established one

 

  • Unsecured Business Loans

The nature of an unsecured business loan is collateral-free. It means you don’t have to provide an asset while securing the funds. The lenders will trust your words in the context of repayment. Multiple online lenders offer unsecured business loans for women, which is less risky for the applicants. Check out the benefits and downsides of an unsecured business loan here.

Benefits of unsecured business loan

  1. The shorter loan application process
  2. No need for a cosigner
  3. It doesn’t require asset or collateral
  4. No risk of losing the asset as payment

Drawbacks of unsecured business loan

  1. They are harder to qualify for
  2. High-interest rates
  3. Loan amounts are often smaller

 

  • Small Business Administration (SBA) Term Loans

SBA Term Loans are considered a terrific alternative for business financing. Women entrepreneurs primarily seek a loan of this kind when they cannot qualify for a traditional small business loan. Find here the precise advantages and disadvantages of SBA-Term Loan.

Benefits of SBA-Term Loan

  1. Comparatively relaxed requirements than traditional bank loans
  2. Lower down payment needs
  3. Feature more extended repayment terms
  4. Both new and established businesses are eligible for SBA loans

Drawbacks of SBA-Term Loan

  1. Requires some extra paperwork while applying
  2. May require collateral to secure the repayment of an SBA loan, including a personal guarantee
  3. The application process may be slow and lengthy if you use a non-SBA preferred lender

 

  • Merchant Cash Advance

The suppliers get a lump sum amount in advance from the merchants through daily or future credit or debit card transactions in a mechanism. Many times the women entrepreneurs may experience financial crunch while running a business. This kind of loan can resolve the liquidity crunch for the time being. Get to know about the advantages and disadvantages in detail.

Benefits of Merchant Cash Advance

  1. Instant and quick funding
  2. EMIs are not fixed
  3. Borrowers with low or bad credit score can also qualify
  4. No collateral required
  5. The borrowed amount does not increase

Drawbacks of Merchant Cash Advance

  1. High-interest rate
  2. Expensive small business loans
  3. The temporary solution to meet working capital requirements
  4. Funds are deducted daily
  5. The interest rate varies from merchant to merchant

 

  • Business Lines of Credit –

Unlike other types of loans, a business line of credit is similar to a credit card. You can utilize the fund whenever needed, but you have to ensure that you won’t exceed the established credit limit.

Another exception is that you can withdraw cash using a business line of credit to cover whatever expense you need to pay for. Find here the advantages and disadvantages in detail.

Benefits of Merchant Cash Advance

  1. Improves cash flow during slow seasons
  2. Allows you to pay for what you use
  3. Improves business adaptability
  4. Builds business credit for future

Drawbacks of Merchant Cash Advance

  1. Extra charges and fees
  2. Difficult to qualify for
  3. Potential for misuse
  4. Low borrowing limits

Who are eligible for a women entrepreneur loan?

Multiple studies have confirmed that women are comparatively reliable borrowers. In comparison to male business owners, women tend to have a lower insolvency rate.

However, it has also been found out that women are reluctant to apply for loan and opt-in for business financing. To encourage them and let them recognize their valued contribution, lenders in the UK offer excellent business loan with simple eligibility criteria. To apply-

  1. You must be a female business owner over the age of 18
  2. Your business must be registered in the United Kingdom
  3. Trading for at least six months with a minimum monthly turnover of £5,000

Step-by-step guide on applying for a business loan

Women in the UK have a lot to offer to the world of business. That’s why lenders keep the loan application process more manageable. In just four steps, women can avail the fund they need. The steps are –

  1. Provide details for business verification
  2. Give them your personal and contact details
  3. Read the terms and conditions
  4. Click submit to apply for the loan

Within a maximum of 24 hours, the loan amount will be disbursed in your bank account.

Conclusion

You’ll be surprised to know that Women lead only 19% of SMEs in the UK. To increase the amount in the upcoming years, several types of loans are available in the market. The primary advantage that business loans offer is the promotion of gender inclusivity in the business finance realm. If you think of opening a business soon, don’t miss out on the amazing funding opportunities.

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