Present and future female entrepreneurs, take note: online establishments are offering an alternative route for business owners who are trying to secure the money they need to achieve their goals.
Two big players in the world of online finance – loan company Lending Club and online money transfer service PayPal – are offering affordable lending options for new and growing businesses. Their efforts are designed to specifically benefit small-business owners, a community of people that frequently experiences difficulty with securing capital through traditional means.
It’s an issue that is especially pertinent to female entrepreneurs, as Biz2Credit estimates that loan approval rates for women business owners are 15-20 percent lower than approval rates for male entrepreneurs.
PayPal first launched its venture, PayPal Working Capital, late last year.
“It’s available to select businesses that already process payments through PayPal,” the site explains. “If your business qualifies, the lender reviews your PayPal cash flow history to customize a special offer.”
Meanwhile, Lending Club – a Google-backed, peer-to-peer lending outfit that had previously only offered consumer loans – made its way into the small-business loan sector just last month.
Lending Club’s site boasts multiple loan options, depending on the needs of the entrepreneur in question.
Two other organizations – Dealstruck and Funding Circle – are also attempting to establish peer-to-peer lending systems for small business owners, according to Bloomberg Businessweek. And more are expected to follow in their footsteps.
All the same, Main Street operations would be wise to research these options further – and to read the fine print – before jumping in head first. According to The New York Times, some firms will require the offering of business assets as collateral, or a personal guarantee, before a loan is granted.