Lending Library

As a small business owner, you know the value of flexibility. Circumstances can change rapidly, for better or worse—a few days of bad weather or a positive Instagram post from a popular influencer can have huge impacts on a small business’ cash flow. In many cases, business is seasonal—companies need to prepare for a busy season while experiencing a slow season, meaning they need funds that aren’t flowing in as revenue. This is why many turn to business lines of credit.Business lines of credit are very flexible and don’t carry the stringent application requirements like some other forms of financing, like term loans. However, they can provide as much as $250,000 with interest rates as low as 8%.

How does a business line of credit work?

A business line of credit is a financing method that allows businesses to access money as expenses arise.

They are more similar to a business credit card than to a business loan because you don’t receive a lump disbursement all at once that requires monthly repayment.

If you access funds through a business line of credit, interest accrues on any balance that is not paid down through repayments. As you pay down the balance, the amount of credit available to use increases.

Limits on a business line of credit are set by a lender. Lines of credit are typically renewed over time, assuming the borrower’s creditworthiness remains in good standing.

Business lines of credit can be secured or unsecured. With a secured line of credit, a borrower puts up cash or assets as collateral in case of default. No collateral is required for an unsecured line of credit. If you want to access a large line of credit, as in greater than $100,000, a borrower might want you to put up collateral in a secured line of credit arrangement.

Business line of credit pros:

• Revolving access to credit, usually without the need for collateral
• Credit limits often higher than with credit cards
• Interest rates typically lower than credit cards

Business line of credit risks:

• Repayment terms might not be as good as other financing methods, like term loans
• Approval processing time is usually longer than with credit cards
• Credit cards are more likely to offer 0% APR introductory terms than business lines of credit

When to consider a business line of credit.

A business line of credit might work well if you find your business in one of these scenarios:

• Seasonal business fluctuations: If your business sees its fortunes rise and fall with the seasons, a line of credit can keep you afloat during the quieter months.
• Cash flow shortages: Consider a credit line when late payments from clients affect your daily operations. It can bridge the gap and help maintain smooth business continuity.
• Inventory purchases: Bulk buying often saves money, and access to a credit line means taking advantage of such savings without depleting your cash reserves.
• Capitalizing on opportunities: When an opportunity for growth presents itself unexpectedly, a business line of credit allows you to act swiftly and decisively.
• Emergency preparedness: Unforeseen expenses, such as equipment repairs or natural disasters, can strike at any time. A line of credit provides a safety net for these scenarios.
• Credit building: Establishing and using a line of credit responsibly can help build your business's credit profile, opening the door to better financing options in the future.
• When you need a higher credit limit: Scaling your operations often requires more significant financial backing. If your business is growing faster than anticipated or you're making pricier investments and you're consistently maxing out your existing credit, it might be time to explore options for a higher credit line. This ensures you have the capital needed to sustain that growth while keeping your finances manageable.
• When credit cards aren't an accepted form of payment: Sometimes, specific vendors or large transactions require alternate payment methods. A business line of credit provides the flexibility to handle such situations with ease, ensuring that your operations run without a hitch.

How does a business credit card work?

Assuming you are one of the 191 million Americans who have at least one credit card, you can probably understand business credit cards—they are credit cards created for businesses.

Going a little deeper, a credit card is more than just a plastic rectangle. The card represents an agreement between the credit card company and a borrower. The borrower purchases goods and services from vendors using funds made available by the financier. As per the terms agreed to by both parties, the borrower then pays back these funds over time—typically with interest if a balance is not paid down within one repayment period.

Business credit cards are usually unsecured, meaning the borrower does not have to offer collateral as part of the agreement.

Business credit card pros:

• Approval period for credit card usually takes less than 24 hours, often just minutes
• Credit cards are usually unsecured and don’t require collateral
• Many credit cards have introductory offers or allow users to accrue points and cash back

Business credit card risks:

• Credit cards typically have higher interest rate terms than many other forms of small business financing
• Credit cards often have lower credit limits than business lines of credit
• Some bills, like rent, cannot be paid via credit card, but can be paid from a line of credit

When to consider a business credit card.

A business credit card might work well if you find your business in one of these scenarios:

• For everyday purchases: Use a business credit card for routine expenses. It's perfect for office supplies, software subscriptions, or travel expenses, all while helping you keep personal and business expenses separate.
• Reward programs: Choose a credit card that offers rewards like cash back, points, or travel miles. It's a smart way to benefit from the spending that you're already doing.
• Building credit: Just as with a line of credit, responsible use of a business credit card can bolster your company's creditworthiness, potentially leading to more favorable loan terms in the future.
• Employee expenditures: Issue cards to key staff members to streamline procurement processes and expense tracking, while setting individual credit limits to maintain control over spending.
• Simplified accounting: Consolidate your business expenses on a credit card for clearer bookkeeping. Many cards offer integration with accounting software, making reconciliation processes smoother.
• Interest-free periods: Take advantage of credit cards that offer 0% introductory APR. It’s a great way to manage cash flow if you can pay off the balance before the promotional period ends.
• Easier approval: Sometimes, obtaining a business credit card is quicker and requires less documentation than securing a business loan or credit line, especially for emerging businesses.
• Tracking expenses: Keeping tabs on where your money's going is essential for any business. By using a business credit card, you can monitor expenditures with ease, thanks to detailed monthly statements and categorization of expenses. This clarity not only simplifies budgeting but can also highlight spending patterns, helping you to identify potential savings and make informed financial decisions.

Business line of credit vs. credit card: The difference.

Business credit cards are good for everyday one-off expenses like office supplies and travel expenses. Business lines of credit are good for larger or recurring expenses, like rent or bills from vendors. Many of these types of expenses won’t accept credit cards but will accept funds from a line of credit.

Business lines of credit usually have maximum credit levels that are much larger than credit cards, so they are better for bigger purchases.

Approval for a business line of credit often takes longer than with credit cards, sometimes 1 or 2 weeks. In some situations, credit card applications can be approved nearly instantaneously.

Interest rates for lines of credit tend to be lower than for credit cards. Interest rates for lines of credit can be as low as 8%. Interest rates for credit cards are often between 10% and 20%, although many have introductory offers with 0% APR.

Imagine a yoga studio that is usually slow leading up to the holiday season but expects a large increase in class size after New Year’s resolutions to get fit and meditate more. With a business line of credit, the studio can buy equipment, rent larger spaces, and hire more teachers during the slow time so they are ready for the crowds on January 2. 

On the other hand, the yoga studio might want to take on expenses as they come—perhaps it realizes a week in that it needs more yoga mats. The studio can use a business credit card to take care of this expense.        

Business line of credit vs. credit card: Which one works best for you?

Choosing between a business line of credit and a credit card will depend on how much credit you need, how fast you need it, and for what expenses. For some industries that are seasonal and require large inflows of capital, like construction and healthcare, a business line of credit can be ideal. For others, like restaurant and trucking companies, you might have a lot of one-off smaller expenses like pots and pans or fuel. A business credit card might be best here.

Either way, you can see all your business line of credit options at Lendio, which works with top financiers to show you options in minutes.

*Information provided on this blog is for educational purposes only, and is not intended to be business, legal, tax, or accounting advice. The views and opinions expressed in this blog are those of the authors and do not necessarily reflect the official policy or position of Lendio. While Lendio strives to keep its content up-to-date, it is only accurate as of the date posted. Offers, interest or factor rates, or trends may expire, or may no longer be relevant.

Black-owned businesses are essential to the US economy, driving innovation, creating jobs, and contributing to the community. However, these businesses often face unique challenges that hinder their success. Discover the state of Black-owned businesses in the US, including key statistics, contributions to the economy, challenges, and access to business financing.

Key facts

• There are an estimated 3.7 million Black-owned businesses in the United States and an estimated 161,422 Black-owned businesses with at least one employee in the United States.
• The District of Columbia has the highest percentage of Black-owned businesses (35%) and employer firms. (15.17%).
• Florida has the largest total number of Black-owned businesses (461,149) and employer firms (18,502).
• World Wide Technology is the largest Black-owned business with $17 billion in annual revenue. 
• Black or African American women own an estimated 58,974 businesses with at least one employee, employing 481,930 employees.
• The number of Black-owned businesses increased 13.6% from 2017 to 2020.
• 47% of Black business owners who apply for a loan are denied.

Number of Black-owned businesses in the United States.

The 3.7 million Black-owned businesses in the United States make up 11.3% of all businesses, coming close to the 13% Black population percentage. However, only 2.7% (161,422) of the United States employer firms are Black-owned businesses. Given employer firms are more likely to be profitable and face fewer challenges in acquiring credit, increasing the percentage of Black employer firms is crucial to improving the success of Black entrepreneurs.

States with the most Black-owned businesses.

Large states such as California, New York, and Texas along with Southern states, Florida and Georgia, contain the highest number of Black-owned businesses.

States with the highest percentage of Black-owned businesses.

The District of Columbia has the highest percentage of Black-owned businesses along with other Southern states Georgia, Maryland, Mississippi, and Louisiana. 

Top 10 Black-owned businesses

The following section highlights the top Black-owned businesses in the US based on their annual revenue. From World Wide Technology to Hightower Petroleum Co., these companies have made significant contributions to the US economy across various industries such as technology, automotive, food service, and media.

1. World Wide Technology:  $17 billion annual revenue

World Wide Technology is a technology solution provider that offers innovative and customized IT solutions to businesses of all sizes. World Wide Technology was founded by David Steward in 1990 and is based in St. Louis Missouri.

2. Act 1 Group: $2.8 billion annual revenue

Act 1 Group is a global consulting and staffing firm that provides professional services in the fields of technology, government, and entertainment. The company was founded in 1998 by Janice Bryant Howroyd, who is often referred to as the first African American woman to build a billion-dollar business. Howroyd started the company with just a single office in California and has since grown it into a multinational corporation with over 17,000 global clients. 

3. Bridgewater Interiors: $2 billion annual revenue

Bridgewater Interiors L.L.C. is a Black-owned automotive supplier founded by Ron Hall Sr. and his wife Joyce that provides interior parts and components to major car manufacturers such as General Motors and Ford. The company was established in 1998 and is headquartered in Detroit, Michigan.

4. Coca-Cola Beverages Florida: $1.2 billion annual revenue

Coca-Cola Beverages Florida L.L.C. is a Black-owned Coca-Cola bottler founded by Troy Taylor in 2015 that produces, distributes, and markets Coca-Cola products in Central Florida. The company is headquartered in Tampa, Florida, and has become one of the largest privately held Coca-Cola bottlers in the United States.

5. Modular Assembly Innovations: $1.12 billion annual revenue

Modular Assembly Innovations L.L.C. is a Black-owned company founded by Billy Vickers in 2003 that provides modular assembly solutions to the automotive industry. The company is based in Dublin, Ohio.

6. Bridgeman Foods: $870 million annual revenue

Bridgeman Foods is a holding company founded by Ulysses Bridgeman Jr. in 2016 that operates several restaurant chains, including Chili's Grill & Bar and Fazoli's. The company is based in Louisville, Kentucky, and has become a major player in the restaurant industry.

7. Thompson Hospitality: $800 million annual revenue

Thompson Hospitality Corp. is a food service provider founded by Warren Thompson in 1992 that operates restaurants and other food service facilities across the United States. The company is headquartered in Reston, Virginia.

8. The Anderson-DuBose Co.: $703 million annual revenue

The Anderson-DuBose Co. is a food service distributor founded by Warren Anderson and Wendell DuBose in 1991 that provides products to McDonald's restaurants across the United States. The company is based in Lordstown, Ohio, and has been recognized for its exceptional customer service. 

9. Urban One: $484 million annual revenue

Urban One Inc. is a media company founded by Cathy Hughes in 1980 that operates radio stations, digital media outlets, and cable television networks. The company is headquartered in Silver Spring, Maryland. 

10. Hightower Petroleum Co.: $450 million annual revenue

Hightower Petroleum Co. is a fuel distributor founded by Milford Hightower in 1984 and is based in Middletown, Ohio. The company is one of the largest minority-owned petroleum distributors in the United States. 

Contributions of Black-owned businesses

Black-owned businesses are an integral part of the American economy, contributing significantly to the growth and development of various industries.

• Healthcare and social assistance is the most common sector for Black-owned businesses.

• Black-owned businesses produce about $183.3 billion in annual receipts, employing 1.4 million employees.
• New Mexico has the highest percentage increase (323.8%) in new Black-owned startups from the year 2020-2021.
• Vermont had the highest percentage increase in jobs (93%) at Minority Business Enterprises from 2021 to 2022. 

Funding and access to credit

When starting a business, getting funding and access to business loans can be a significant challenge, particularly for entrepreneurs of color.

• 84% of businesses with at least one employee started by a person of color relied on personal savings, friends, or family to fund the business.
• 28% of businesses with at least one employee started by a person of color have obtained a business loan vs 48% of white-owned startups.
• 47% of Black business owners who apply for a loan are denied.

Current challenges

Like other small business owners, Black business owners report growing sales and hiring qualified staff as their most common challenges.

• 63% of Black business owners identified reaching customers/growing sales as an operational challenge.
• 53% of Black business owners identified hiring or retaining qualified staff as an operational challenge.

Black-owned businesses are a vital component of the American economy, driving innovation, creating jobs, and contributing to the community. Despite the challenges they face, such as limited access to funding and credit, Black entrepreneurs continue to make significant strides in various industries. The statistics presented above demonstrate the progress made by Black-owned businesses in recent years but also highlight the need for continued support and resources to ensure their continued success. It is crucial to address the systemic barriers that hinder the growth of Black-owned businesses and provide equal opportunities for all entrepreneurs regardless of their race or ethnicity.

References

2021. U.S. Census. https://data.census.gov/table/ABSCS2021.AB2100CSA01?q=Small%20Business&t=Race%20and%20Ethnicity&y=2021.

U.S. Census. Accessed February 8, 2024. https://data.census.gov/table/ABSCS2021.AB2100CSA01?q=Small%20Business&g=010XX00US$0400000&nkd=ETH_GROUP~001,SEX~001,VET_GROUP~001.

“Business ownership.” 2020. National Equity Atlas. https://nationalequityatlas.org/indicators/Business-ownership.

“Nonemployer Statistics by Demographics series.” n.d. U.S. Census. Accessed February 9, 2024. https://data.census.gov/table/ABSNESD2020.AB2000NESD01.

“Top 100.” n.d. Black Enterprise. Accessed February 8, 2024. https://www.blackenterprise.com/be100s/top100/#top-100.

“2023 Report on Nonemployer Firms: Findings from the 2022 Small Business Credit Survey.” 2023. Fed Small Business. https://www.fedsmallbusiness.org/reports/survey/2023/2023-report-on-nonemployer-firms.

“2023 Report on Startup Firms Owned by People of Color: Findings from the 2022 Small Business Credit Survey.” 2023. Small Business Credit Survey. https://www.fedsmallbusiness.org/reports/survey/2023/2023-report-on-startup-firms-owned-by-people-of-color.

“2022 Minority Businesses Economic Impact Report.” n.d. NMSDC. Accessed February 8, 2024. https://nmsdc.org/wp-content/uploads/2023/08/NMSDC-2022-Minority-Businesses-Economic-Impact-Report-May-2023.pdf.

In general, being an entrepreneur is tough, but many minority entrepreneurs face an even steeper climb on the path to success for a myriad of reasons. They have limited access to startup funding, lack networks and mentorship programs, and face discrimination and systemic biases. 

Given these hurdles – and the fact that 20% of all new businesses fail within the first year – it’s critical that minority entrepreneurs set up shop in as favorable a location as possible. 

Lendio analyzed eight metrics to determine the best states for minority entrepreneurs, considering factors such as access to small business loans catered to underserved communities, business ownership rates compared to the state’s minority population, job growth at minority-owned businesses, and overall income equality.

Key findings

• Vermont No. 1 Best State for Minority Entrepreneurs:  Driven by its high percentage of business loan approvals per 10,000 residents, an influx of minority-owned startups, low unemployment rate, and lower overall income disparities.
• Hawaii has the highest minority business ownership rates in the country. 51% of businesses are owned by minorities in Hawaii while minorities make up 78% of the state’s population. Hawaii dips in overall rankings due to lower access to capital, average unemployment rates, and lower startup growth.
• Washington D.C. has the highest Black business ownership rates in the country. While D.C. also has one of the highest approval rates for Community Advantage loans and microloans, it falls in the overall rankings due to Blacks and African Americans only owning 15% of small businesses despite making up 42% of the population along with high unemployment rates and income disparities.

Top 20 states

In No. 1 Vermont, the number of Community Advantage loans (.015) and SBA microloans (.34 ) approved per 10,000 residents is high (.34). While West Virginia has the least disparity between its minority population and percentage of minority-owned businesses, Vermont comes in third at a 6.7% difference. Vermont also saw a 560% increase in the number of startups under two years old run by minority entrepreneurs from 2000 to 2001 and a 93% increase in job growth at Minority Business Enterprises. With an average unemployment rate of just 2.23% and a Gini index of .45, Vermont provides a fertile economic environment for small business owners. 

Wyoming, South Dakota, North Dakota, and New Hampshire round out the top five best places for minority entrepreneurs. Wyoming (161.7) and South Dakota (90.98) both receive a high number of Community Reinvestment Act loans per 10,000 residents. North Dakota saw a large increase (86%) in job growth at Minority Business Enterprises from 2021-2022. New Hampshire has the second lowest minority unemployment rate at 1.5%

When the list is filtered to Black or African American populations specifically, Alaska, New Mexico and Hawaii move into the top 20 with Missouri, Massachusetts, and Ohio dropping out.

States with the highest percentage of minority-owned businesses.

While the rankings above compare the percentage of businesses owned by minorities to the percentage of the population that is a racial minority, these rankings show the percentage of minority-owned businesses overall.

States with the highest percentage of Black-owned businesses.

While the rankings above compare the percentage of businesses owned by Blacks or African Americans to the percentage of the population that is Black or African American, these rankings show the percentage of Black-owned businesses overall. Visit this post for more Black-owned business statistics.

Growth of minority-owned businesses

The number of businesses owned by Black, Hispanic, and Asian Americans has climbed to record highs – reaching about 1.2 million in 2020, up more than 50% compared to 2007. 

This is welcome news given research shows that workforce diversity is good for the companies’ bottom line and for the economy at large.  More than half of the 2 million new businesses started in the U.S. over the past 10 years were launched by minorities, creating 4.7 million jobs. But America has much more work to do to empower minority entrepreneurs. People of color own only 20% of U.S. businesses despite making up roughly 40% of the population. This contributes to income inequality.

Lending environment

Access to capital is crucial for any small business owner, but it is particularly important for minority entrepreneurs who may struggle to secure startup funding or loans from traditional financial institutions. The lending gap – which can also come in the form of unequal lending terms and underinvestment – hinders minority entrepreneurs’ ability to start, invest in and scale their businesses.

The data speaks for itself: 52% of white entrepreneurs are fully approved for financing, compared with 35% of Asians, 28% of Hispanics and 27% of Black applicants. In fact, 40% of Black business owners don’t even apply for financing because they expect they’ll be rejected, according to the National Minority Supplier Development Council.

Minority entrepreneurs may face challenges in obtaining loans or credit from traditional financial institutions, but there are some policies and programs from the Small Business Administration that aim to bridge the funding gap and support entrepreneurship in underrepresented communities.

The Community Reinvestment Act, for example, requires banks to offer lending and investment services to underserved communities, and regulators are considering substantial reform that would make race and ethnicity an explicit focus. Our analysis of CRA loans originated per 10,000 residents – 120 on average across the states – examines how well banks are currently supporting underserved business owners, though it doesn’t address minority business owners specifically. Montana ranked the best on this metric, with 180 in CRA loans per 10,000 residents, while West Virginia came in last with 66.

Meanwhile, the 7(a) Community Advantage loans are targeted at small businesses in underserved markets, including opportunity zones and low- and moderate-income areas. Overall, 49% of these loans went to racial and ethnic minorities in 2023, compared with roughly 33% of 7(a) and 504 loans in 2023, which are other common loans for small business owners. 

Economic environment

The overall economic environment in a state also offers clues as to the level of opportunity for minority business owners. Income inequality, for example, is measured using the Gini index; a score of 0 would indicate perfect equality, while a score of 1 indicates total inequality. In the U.S., the Gini index was 0.482 in 2022, up slightly from .481 in 2021. 

Studies have found unemployment rates and entrepreneurship rates have a dynamic relationship with unemployment spurring entrepreneurship and entrepreneurship in turn lowering unemployment rates. However, studies have also found that unemployment spurring entrepreneurship only holds true in higher-income areas.

There are also longstanding racial gaps when it comes to underemployment, defined as the share of the labor force that is 1) unemployed, 2) working part-time but would like to work more or 3) recently gave up job-seeking but would prefer to work. According to the Economic Policy Institute, the underemployed rate was 9.8% among Black adults, 9.9% among Hispanics and 5.5% among white people in December 2023.

Conclusion

Not all business owners have equal opportunities to succeed. In particular, minority entrepreneurs face barriers in accessing the capital they need to start and grow their businesses – even in the top-ranked states. With this report, we aim to raise awareness about the need to level the playing field for minority entrepreneurs. 

Specifically, we recommend the following within the lending industry:

• Greater use of automation throughout the qualification process: Automation not only expands access to capital for more small businesses by reducing costs for lenders but also reduces discrimination and bias. For example, a paper by the National Bureau of Economic Research found that after traditional banks automated their processes, lending to Black-owned firms increased.
• Alternative underwriting solutions: Many small businesses are cash-only making it difficult to build up the business credit necessary to meet traditional loan qualification requirements. Lendio’s technology mines customer deposit data instead of relying exclusively on credit score to pre-qualify customers for a loan. This approach is supported by a paper from the Bank for International Settlements that found that the alternative data used by two FinTech companies was able to better predict future loan performance than traditional methods, especially in areas with high unemployment.
• We're pleased to see progress toward more resources for underserved groups, like the recent announcement from Treasury Dept and Vice President Harris in April of over $1.73 billion in grants for Community Development Financial Institutions (CDFIs) across the country.

Methodology

We used the most recent data for these eight metrics below to determine the best states for minority entrepreneurs. We used a Z-score distribution to scale each metric relative to the mean across all 50 states and Washington, D.C., and capped outliers at 2. We multiplied some Z-scores by -1, given a higher score was negatively associated with being above the national average. A state’s overall ranking was calculated using its average Z-score across the eight metrics. In cases where states were missing data due to a low sample size, the remaining metrics were averaged to determine their overall scores. Here’s a closer look at the metrics we used:

Lending environment

• Community Advantage Loans approved (Small Business Administration, 2021-2022), per 10,000 residents (Census Bureau, 2022)
• Microloans approved ((Small Business Administration, 2021-2022), per 10,000 residents (Census Bureau, 2022)
• Community Reinvestment Act loans originated for small business owners with revenues of $1 million or less Federal Reserve, 2021, per 10,000 residents (Census Bureau, 2022).

Business environment

• Difference in minority business ownership rate, measured as percentage of employer firms owned by a person of color, (Census Bureau, 2021) vs minority population percentage. (Census Bureau, 2022)
• Percentage change in the number of jobs at designated minority business enterprises (National Minority Supplier Development Council, 2021-2022)
• Percentage change in the number of new businesses (under two years old) that are owned by minorities (Census Bureau, 2020-2021)

Economic environment

• Gini index of overall income inequality (Census Bureau, 2021)
• Minority population average unemployment rate (Economic Policy Institute, Q3 2023)

Editor’s note: This article was originally published in 2020 with updates in December 2022 by Rachel Mennies Goodman and Lendio’s editorial team.

Economies are cyclical. Even the most fine-tuned cycle can have problems shifting into the next gear every now and again. Running a business that can weather just about any economic storm, or as we like to call them, "recession-resistant" businesses, is an exciting prospect.

So where would you find one of those? In our updated list of recession-resistant businesses, each harboring the possibility of financial rewards even when an economy dips into a not-so-rewarding time.

Discount retail

Discount retail is the only industry to appear twice on the list of the top 10 S&P 500 stock performances from 2008, a.k.a., the most recent, official recession in memory. During the 2008 recession, Walmart’s stock grew 20% and Dollar General’s increased 60%. It’s not just stock prices either—in 2008, Dollar General’s sales increased 9%. 

Small businesses can see this bump, too. During any economic downturn, convenience stores and local shops may displace grocery stores and bigger retailers by providing lower prices — and convenience. 

Delivery services

Any time that goods are bought and used, they need to get from Point A to Point B. That’s why FedEx’s and UPS’s domestic operations continue operating during a slowdown. There is, of course, a catch: the broader “shipping and logistics” industry was shown to be susceptible to slowdowns when the Covid pandemic disrupted international supply chains. Still, that same period also highlighted the value of local point-to-point delivery as Door Dash, Uber Eats, GrubHub and the like experienced a spike in new customer acquisition in early 2020.

Groceries and specialty foods.

Remember Maslow’s hierarchy of needs? At the bottom level is food. We all need to eat. And if households pull back on restaurant fare during economic challenges, that often means a boost in the sale of groceries for at-home cooking. More simply put, when economies go south, sales of basic staples increase.

Does that mean luxury food items take a hit? A quick look at 2008 indicates no. “We’re seeing an increase in items like pate and robust cheeses, blue cheeses, washed-rind cheeses,” said Whole Foods specialty coordinator Frank Schuck noted in 2008.  “With these items, a little goes a long way.”

Household essentials

Think back to the toilet-paper rush of March 2020. Whenever there’s a blip in the economy, household essentials hold their own. Falling under the same umbrella as grocery staples, certain household and hygiene essentials are inevitably the last things cut from household budgets or business budgets. This is also a case in which luxury vs. housebrand may not matter so much. A shopper might buy an off-brand disinfectant spray, seeing no difference from the name brand, but splurge on the tissues that make their nose feel good.

Utilities

The demands for gas, water, and power continue during a recession. When prices for each of these necessities is high, however, growth slows. Where are we now? Gas prices have dropped to the lowest level in more than a year. If history has a say in the matter, that means consumer spending on fuel will start to climb up.

Accounting

As the saying goes, only two things in life are certain … and accountants help prepare one of those things, taxes. Accountants generally have low unemployment. During the 2008 recession, the accounting sector added thousands of jobs as unemployment neared 9.7%. 

Speaking of taxes, if your business employed workers through pandemic slowdowns in 2020 and 2021, you may be eligible for the Employee Retention Tax Credit, which can net you up to $26,500 in tax credits (and even a refund?) per employee. You can find out here if your business may be eligible for the cash.

Funeral services

Funerary workers help prepare the other “certain thing” in the aforementioned idiom. The death industry has faced numerous issues not directly related to recessions over the years, including consolidation of small businesses and longer life expectancy. But even as spending on death decreases, it doesn’t ever completely stop, so funeral homes and services tend to have a steady supply of business.

Home repair (retail and service).

During a downturn, households can’t afford to buy a new home. However, they might have enough money to repair and remodel their current home. Nasdaq.com notes, “Home Depot is poised to maintain its sales growth through difficult times and boom once the economy recovers due to the state of the housing market.” That same trend likely extends to competitors Lowe’s and local hardware stores and to businesses and contractors who do repair jobs, too. 

Auto repair (retail and service).

Usually, auto repair and auto parts stores see increased business during a recession as consumers do their best to hold onto their cars instead of buying new ones, although consumers may only invest in the most necessary repairs. Still, after a few years of supply challenges, it’s hard to predict what might happen if the economy enters a recession in 2024.

Laundry 

People continue washing their clothes during a recession. Cleaners and coin-operated laundries still face numerous challenges: consumers might wait longer between washes, and location and changing demographics can wreak havoc on a laundromat if its customer base moves out. But well-located laundromats can expect to see at least some business even during a downturn. Plus, households might opt to hold off on repairing a broken washing machine and use a laundromat instead until their financial condition improves.

Fast food and fast-casual restaurants.

Sit-down restaurants often feel the pinch of a recession as households stay in and cook more to save money. But fast food stalwarts like McDonald’s and KFC see relatively steady sales during downturns as consumers look for value and comfort. Incidentally, the 2008 recession was one of the major catalysts of the fast-casual trend. Restaurants like Chipotle, Shake Shack, and Noodles & Co. found success with slightly higher-quality ingredients and made-to-order meals, even if it was a bit more expensive than traditional fast food. At the same time, casual chains, including Applebees and Chili’s, saw a dip in sales with 2008’s more value-conscious consumers.

Alcohol

So-called “sin” industries often do well during recessions, and alcohol sales grew following the 2008 financial crisis. Interestingly, craft beer sales grew in the 2008 recession as sales of macrobrews (Budweiser and Coors) fell significantly. Why? No one is sure, although value-conscious consumers may have been treating their 6-pack in the ‘fridge as an affordable luxury and prioritizing taste (and possibly higher alcohol content) over price.

Bankruptcy lawyers

Some businesses only do well when someone else is having a terrible day. In early 2020, when the US economy was eyeing its worst situation since the Great Depression, Fortune noted that job listings for bankruptcy attorneys had tripled “since January [2020] on online job board ZipRecruiter, while postings across all industries have fallen 48%.”

Collection and repo agents.

Lawyers aren’t the only ones who have to swoop in during tough times. Collections agencies can experience increases in traffic during recessions, although it’s a double-edged sword: the 2008 downturn showed that as work for collections agents increased, profits decreased because they were collecting smaller sums and cutting their profit margins.

BTW, repo services also see a huge surge of repossessions early on in a recession, but it doesn’t last. If the economic stagnation lasts for more than a year or two, there are simply fewer cars left to repossess.

Waste disposal

The failure of garbage pickup is one of the most commonly-cited signifiers of infrastructure failure. Expect garbage disposal to be one of the last services to be cut or reduced. Barron’s notes that “80% of sales are service-based and not tied to the health of the overall economy.”

Staying ahead of the economy's fluctuations.

BTW, research from the Harvard Business Review provides crucial lessons for any business hoping to endure a possible recession—and the first lesson, perhaps the most important, is to start preparing early. There are a million reasons to wait, but they’re all outweighed by the fact that delaying efforts only dilutes your prep’s ultimate effectiveness. 

“Main Street has it right,” explains the HBR. “Even as the debate about ‘when’ continues among economic forecasters, companies should begin to prepare themselves for the next recession…as getting ahead relative to peers (even slightly) during recession gives companies an advantage that is tough to reverse when the economy is doing better.”

So whether you’re considering a pivot of your business model, an addition to your services, or simply applying for financing, like a small business loan or a business line of credit to ensure you retain a positive cash flow regardless of what the economy throws your way in 2024, taking action early is the best way to minimize the impact of an economic downturn.

_{The views and opinions expressed in this blog are those of the authors and do not necessarily reflect the official policy or position of Lendio. Any content provided by our bloggers or authors are of their opinion and are not intended to malign any religion, ethnic group, club, organization, company, individual or anyone or anything. The information provided in this post is not intended to constitute business, legal, tax, or accounting advice and is provided for general informational purposes only. Readers should contact their attorney, business advisor, or tax advisor to obtain advice on any particular matter.}

Debit cards continue to be a pillar of the modern payment ecosystem. A 2019 study by the Federal Reserve found that 31% of consumer purchases were paid for with a debit card. While they look almost indistinguishable from credit cards, debit cards function essentially like cash in practice. For consumers, they’re the best of both worlds—the simplicity of credit cards coupled with the hassle-free nature of cash.

For small businesses, though, debit cards function more like credit cards because you’ll be charged a variety of fees each time a debit card is swiped at your establishment. However, the fee systems for both types of payment are different—and in many cases, the popularity of debit cards is well worth the fees.

Debit cards vs. credit cards.

Debit cards look like credit cards, but the similarities mostly end there. As the moniker suggests, debit cards debit money out of an account, typically a checking or savings account at a bank or other financial institution. When a purchase is made, the funds are deducted directly from the buyer’s account. In this way, debit cards are similar to cash.

Credit cards, on the other hand, involve financial institutions—like banks or credit card companies—extending credit to a consumer. Purchases are made on this credit, and the consumer makes repayments to the credit card issuer.

In a sense, debit and credit cards work in opposite ways for consumers—while credit cards run up credit, debit cards debit funds out of an account. For small businesses, though, accepting payments is fairly similar for both credit and debit cards.

Why are small businesses charged debit card fees?

Both debit and credit cards require sellers to pay a range of fees every time a transaction occurs because a lot of entities are involved whenever a card is used—and all of these entities want something in return for their services.

3 main groups expect to get paid when someone uses a debit card at your business: banks, credit card companies, and debit card processors. The fees charged by these companies can be a combination of flat fees and percentages based on the purchase price.

Types of debit card fees.

The 3 types of fees usually charged on every debit card transaction are interchange fees, assessments, and processor’s markup fees. Interchange fees are charged by the bank that issued the debit card to the customer. Card companies, like Visa or Mastercard, charge the assessments. Debit card processing companies, like STAR or NYCE, charge the processor’s markup.

Several factors can alter the fee amounts, like the size of the bank that issued a debit card and the type of business you own. Whether a PIN or a signature is used when a debit card transaction occurs also impacts fees.

Mobile payment processors.

Mobile payment processors, also known as Payment Service Providers (PSPs), are increasingly becoming a very popular way for small businesses to accept debit and credit card payments. You’ve probably come across businesses that use PSPs like Square and Stripe.

“Most payment service providers use a flat rate structure for pricing,” explains review site Ecommerce Platforms. “Basically, this ensures that you pay the same amount for every transaction, no matter what the card type might be. There’s no monthly fee to worry about, and other costs beyond transaction costs are usually nonexistent too.”

PSPs have become popular because setup is usually cheaper and easier than with traditional merchant account systems. Many PSPs try to charge simple, transparent fees. However, other systems may prove to be less expensive over the long run as your business scales up.

How much are debit card fees?

Debit card fees can vary broadly depending on the debit card used, your merchant category, and whether a PIN is used during the transaction. According to data from 2018, the average interchange fee was $0.23. As a percentage of a purchase, the average interchange fee was 0.57%. These averages are for both signature and PIN transactions. Assessment fees mostly range from 0.11% to 0.13% of each debit transaction. Processor’s markup fees can range from 0.75% to 0.9% of each transaction, plus $0.13 to $0.22. Some of these companies might charge businesses annual fees along with their other fees on every transaction.

What is right for your small business?

Deciding whether or not you want to accept payments other than cash is a big step for your business—but most businesses accept multiple forms of payment, as you’ve probably noticed in your shopping experiences. Knowing the costs associated with accepting cards is very important—especially if yours is a smaller business, as the costs can impact key aspects of your business (like your pricing strategy). Generally, if you’re set up to take credit cards, you should be able to take debit cards as well.

Financing a seasonal business can be tricky. You need up-front capital to prepare for the busy season, and then you need ongoing cash to keep up with mid-season expenses. Thanks to these challenges, it's difficult for seasonal businesses to rely on sales alone to fund all of their costs.

Fortunately, financing can help. With the right seasonal loan, you can cover your bases and make the most of the busy season. Get ahead of the game now by forecasting your financial needs and applying for funds in advance. 

Remember, fast cash is usually expensive cash. If you can predict your needs ahead of time, you can secure much more affordable financing.

First, let's cover a few ways you can use seasonal loans to fund your business. Then, we'll share our 6 favorite financing methods for making it happen.

How to use seasonal financing.

Whether you're preparing for opening day or keeping inventory on the shelves during peak season, seasonal financing can be a huge year-round help. Here are a few ways you can use a seasonal loan to give your business a financial advantage:

• Hire extra help: Add additional headcount to your team to serve more buyers and provide top-notch customer service.
• Stock up on inventory: Purchase sufficient inventory in the pre-season and during the busy season to keep your shelves full.
• Purchase equipment: Buy additional equipment or make necessary repairs to remove bottlenecks and maximize efficiency.
• Launch marketing campaigns: Start generating awareness before and during peak season with targeted advertising campaigns.
• Cover cash flow gaps: Take care of emergencies quickly and stay on top of all your financial obligations.

6 financing methods for seasonal businesses.

1. Short term loan.

If time is of the essence, a short term loan can get you the quick cash you need. You can get a short term loan for as much as $500,000 with terms up to 3 years, helping you stretch out your monthly payments. Plus, these loans are quick. You could get the financing you need in as little as 24 hours.

You can use a short term loan to finance just about any business expense: payroll, equipment, marketing, inventory—you name it. If you need to purchase a lot of up-front inventory or buy an essential piece of equipment, a short term loan can help you do it in no time.

2. Business line of credit.

A business line of credit is the go-anywhere, do-anything financing tool. Your lender will approve you for a certain credit amount, and you'll be able to draw from that line as often as you'd like to. 

Draw what you need, pay it back, and then get access to the funds again. And the best part is that you only pay interest on the portion you borrow—not the entirety of your line of credit. This is what makes a business line of credit a flexible and affordable financing tool.

If you know you'll need extra capital but you're not sure how much, a business line of credit can help you save money. You won't secure more than you need and have to pay off the unnecessary interest.

Use it if you need it, or keep it in your back pocket for an emergency. A business line of credit is a must-have financing tool for any company but especially for seasonal businesses.

3. Accounts receivable financing.

Just because you're making more sales doesn't mean you necessarily have more money. If you have a long cash flow turnover rate, then you likely won't see the income for quite a while, which isn't very helpful if you need money ASAP.

Accounts receivable financing (also known as factoring) lets you sell your outstanding invoices for immediate cash. A factoring company will buy your IOUs and pay you up front for 80% to 95% of the value of your invoices. Then, they'll chase down your customers for the remaining balance and take out their fees before sending you over the remainder.

Sometimes less money today is more valuable than more money tomorrow. If business is booming but your cash is tied up in accounts receivables, this can be a great way to get you the money you need to fund your busy season.

4. Cash advance

A cash advance provides you with a lump sum of cash in exchange for a percentage of your daily sales. Unlike a term loan, payments are based on your revenue (not a fixed monthly payment)— you'll have higher repayments during the busy season and lower payments during the off periods.

You can use your cash advance to finance various business expenses. Qualifying is easy—you just need to prove how much money you make regularly. However, most lenders will look at your last 4–6 months of bank statements, which might not include your previous peak season. This could hurt how much you qualify for.

A cash advance can get you cash quickly, but it's not cheap. You should only turn to a cash advances when you've exhausted your other options. 

5. Small business credit card.

You can use a small business credit card a lot like a line of credit. It'll expand your working capital to cover day-to-day expenses like purchasing supplies, making quick repairs, or even paying the overtime crew.

Small business credit cards can have extensive lending limits, too—you could secure one with a credit line as large as $50,000. The only caveat is that you'll want to spend responsibly so you can pay off the card in full every month. Don't just focus on the minimum monthly payment. Credit cards can have higher APRs, and you don't want to pay more interest than you need.

6. Equipment financing

Equipment financing can help you purchase just about any business-related asset: forklifts, trucks, furniture, software, and more. Plus, you don't need to provide any additional collateral since the equipment you're financing will suffice.

An extra cash register or blender can help you process customers faster, helping you make more sales and capitalize on the peak season. More sales now is worth the monthly expense, especially since you'll own the new piece of equipment moving forward and can sell it at a later point if necessary.

Capitalize on peak season.

Despite the long days and busy hours, most small business owners anxiously await the peak season. With the right financing in place, you'll be positioned to overcome challenges and make the most of every day.

Need help securing funding? Getting you money in the bank is what we do best. Start your 15-minute application to start exploring your seasonal financing options.

The economy is on everyone's mind in 2024, with everything from the housing market to inflation making headlines. If this has you considering your first (or next) small business opportunity, this may also have you considering financial franchise opportunities. A financial franchise allows you to open a business with an established brand presence. Even if you aren’t a CPA or licensed bookkeeper, many franchisors provide the small business know-how you need to get started.

What is a franchise?

You might think of a franchise agreement as allowing the franchisee to open up an outpost of the main business. McDonalds, 7-Eleven, Ace Hardware, and Marriott hotels are all very common franchises. But a franchise is really just a type of license agreement between a small business owner (called a "franchisee") and a bigger company. As part of the agreement, the franchisee gains access to proprietary business knowledge, trademarks, processes, products, and branding of that bigger company or franchisor.

The franchisee gets to run a business with a recognizable brand and a track record of success. The franchisor is paid in return, usually in the form of initial startup fees and annual licensing fees, although agreements vary.

What is a financial franchise?

A financial franchise is a franchise that offers services within the financial service industry. There are franchise opportunities for entrepreneurs interested in small business financing, tax preparation, bookkeeping, and more. Some of the brand names in the financial sector you know well, including Lendio, Allstate, and H&R Block, have franchise opportunities—but there is a whole universe of options.

Categories of financial franchise.

There are financial franchise opportunities across the financial-services spectrum—and ones that customers badly need. We pay taxes, we open businesses, we need financing, we pay employees, and we know everything should be insured—all opportunities for a financial franchise to assist us. 

Key franchise sectors in the financial services industry.

1. Small business lending
2. Tax preparation services
3. Accounting, bookkeeping, and payroll
4. ATMs
5. Insurance

Financial franchise services can also be combined easily into a robust business appealing to a wide swath of customers. With a Lendio franchise, for example, you can offer financing help as well as bookkeeping services.  

1. Small business lending.

A small business lending company is one of the most profitable types of financial franchise—and it’s relatively accessible to open as an entrepreneur. These types of franchises find loans and other funding for small businesses. In many cases, you don’t need to open a physical office, and you only need around $55,000–$65,000 in liquid capital to start.

2. Tax preparation and services.

Tax preparation franchises are very common forms of financial franchises—you’ve probably seen H&R Block or Jackson Hewitt franchises in your area. Depending on the company, you do not need to be a CPA or tax professional to open a tax preparation franchise, because they put you through rigorous training. Since people and businesses will always need help with their taxes, these types of franchises remain popular.

3. Accounting, bookkeeping, and payroll.

While many CPAs, accountants, and bookkeepers open their own solopreneur business or independent small storefront, there are several franchise opportunities for these roles as well. Since accounting is often the last thing entrepreneurs know how to handle, it's logical that many will outsource this factor of operating a company. You may not need to be credentialed to open an accounting franchise, but it helps to be a licensed CPA, CFA, or another financial professional.

4. ATMs

Even in this digital age, we all need cash sometimes. You can open a franchise that installs and maintains ATMs—a great way to get into a financial franchise without a huge infusion of startup capital. This type of business can be a particularly strong fit for an entrepreneur looking for flexible hours. It’s also great if you want to be on the road more and in the office less, especially if your staff is small.

5. Insurance

Insurance is a big enough business to be considered its own field, but it is technically a part of the broader financial industry. Many insurers have franchise opportunities, like Allstate and Farmers. Oftentimes, the companies provide all the training—you don’t have to already be an insurance agent to get started. Because of the field’s product diversity, you can specialize in many forms of insurance, including life, home, auto, small business, rental, and event insurance.

Best financial franchise opportunities in 2024.

First, choosing the best franchise is about finding the right one for you within the market you intend to operate. Will you be serving mostly business clients or consumer clients? Is your market already teeming with accountants and insurance providers or are there only a few options available locally? Do you want to invest in a storefront or would you rather focus on something like small business lending, where you may not need a storefront, the initial fees are relatively low, and you can leverage your existing business network for success?

Because every situation is different, consider the following questions when deciding which franchise is best.

• Why are you interested in starting a franchise? Do you want to be hands on with the business? If so, ensure it's a franchise that you find interesting. If this is this your first and only business, you may be able to commit more time to it than if it's another business you're adding to your portfolio.
  
• How much liquid capital do you have? Most franchise opportunities disclose up front the capital you'll need to invest.
  
• What does your market look like — particularly in terms of competition? The best franchise is usually the one with the best chance to succeed within the market you intend to operate.

How do you get franchise financing?

To get financing for a franchise, you need to ensure that you qualify for both the franchisee agreement and the needed financing for such a business. There are online platforms to help you determine what financing you are eligible for.

What is the most profitable franchise to open?

Fast food franchises, like McDonalds and Dunkin’, are often the most profitable for franchisees. The UPS Store or Anytime Fitness franchises are also known for being profitable. The most important factor, however, should be your interest: think about your passions, and let that lead you to a franchise opportunity that works for you. If your passion is helping people grow or run a business, a Lendio franchise may be a good option. If you’d prefer to work with vacationers, consider hotels, t-shirt shops, or restaurants. Like kids? You may be interested in a childcare franchise or a children’s boutique. In addition to aligning with your own interests, your franchise will be more likely to turn a profit if it fits the physical location (note that some franchises, particularly in the financial services sector, may not require a physical location).

What is the cheapest franchise to invest in?

While many of the most popular franchises require a hefty amount of capital to open, there are dozens of franchise opportunities that require an investment of fewer than $15,000 to open. Some only require an initial fee of $10,000. For about the cost of a used car, you can open up a Jazzercise, Complete Wedding and Events, or Building Stars franchise, for example.

Disclaimer: The information provided in this post does not, and is not intended to, constitute business, legal, tax, or accounting advice and is provided for general informational purposes only. Readers should contact their attorney, business advisor, or tax advisor to obtain advice on any particular matter.

In a world where gender equality is a constant topic of discussion, it's essential that we do our part to uplift and support women in business. Women entrepreneurs bring a unique perspective and innovative ideas to the table, and supporting them isn't merely a moral imperative—it's a strategic one.

There are many ways we can make a difference, from investing in women-owned businesses to mentoring aspiring female entrepreneurs. In this post, we will discuss five actionable ways you can support women entrepreneurs. So, whether you're a seasoned business owner, a budding entrepreneur, or someone looking to make a difference, read on to find out how you can contribute to this critical cause.

1. Seek out women-owned businesses online and in-person.

Perhaps the most important way to show support for women entrepreneurs is to be committed to seeking them out. “We can support them by being conscious of how we are spending our money and intentionally supporting women-owned businesses, says Wendy Muhammad, a real estate developer.

Making a conscious effort to like and share information about a women-owned business on social media is another way to show your support. Exposure is critical and explains why companies spend so much on advertising—and why they spend more on social media than other advertising mediums.

However, B. Michelle Pippin, owner of Women Who WOW, stresses that social media amplification is not as important as making a purchase. “One popular saying is, ‘Even if you can’t buy from her, hitting like or making a comment costs nothing,’ and this is true.” But the problem with that strategy, according to Pippin, is that liking or sharing an entrepreneur’s social media post isn’t putting money in anyone’s pocket. “The women entrepreneurs I work with every day aren’t ‘playing business’—this is how their families are supported financially.”

One interesting fact about women founders: there’s rampant gender disparity in funding.

So when you can, it’s important to actually buy a product or service. And if you can’t buy something yourself, Pippin recommends introducing women entrepreneurs to people who can.  

2. Make it easier to find women entrepreneurs.

Social media makes it easier to find women-owned businesses, but according to N. Damali Peterman, Esq., founder and CEO of Breakthrough ADR, this should extend beyond likes and shares by consumers. “For example, companies and influencers should highlight women-owned businesses in their networks and on their social media platforms,” she explained. “Online retailers like Amazon should have a symbol or identifying mark that indicates if a product is a woman-owned brand.” Peterman says she’s often been in a physical store trying to decide between 2 similar items and made her decision based on the “Woman-Owned” logo on the packaging.   

3. Share experiences

The sisterhood of women entrepreneurs can create a level of support that is mutually beneficial. “Meet each other on Zoom, connect via email, write content that expresses how you are experiencing the pandemic that can be shared,” recommends Deborah Sweeney, CEO of MyCorporation.

“Being a strong steward of information and your experience can be a great way to help other women and to connect.” In fact, when Sweeney writes an article or shares an experience, she often receives feedback from women. “This feedback helps me improve and learn, and others can receive takeaways that can help them.”

4. Collaborate 

Another way to show support for women entrepreneurs is to collaborate with them. Talia R. Boone, founder and CEO of Postal Petals, looks for ways to work with other women and support Black business owners to help them grow their respective businesses. “For example, on Friday on our social media platforms, Postal Petals celebrates #BlackFloristFridays.”  

However, she says it’s those collaborations with larger companies that can help change the trajectory of a small business. “Seek out opportunities to partner with and hire services of women-owned businesses,” Boone advises.

Her advice is seconded by Muhammad. “If you have a business, make women-owned companies one of your stakeholders, and make it a point to hire services providers, for example, who work for women-owned businesses,” she says.

Collaboration can also take the form of offering business discounts. “My company has a Let’s Grow Again! plan that provides startups and small businesses discounted rates for public relations and SEO services,” explains Lisa Porter of Porter PR & Marketing. The goal is to give companies a hand so they can get back on track without the added stress of wondering how they can pay for marketing. “My company got plenty of help when we started, and now it’s time to give back,” she says.

5. Provide mental support and mentorship.

Being a woman entrepreneur is exciting, but it can also be frustrating and mentally draining.  

“If you have a woman in your life who is leading a small business, you can support her by encouraging her to evolve, adapt, and expand with the changing business landscape,” advises Bri Seeley, business growth advisor and entrepreneur coach. “Encourage her to look beyond what her business has been and to begin looking at what it could be.”  

Sometimes, that’s hard for women to do when they’re struggling to stay afloat while juggling numerous other roles at home. “The best way to help women entrepreneurs is to provide mental support to lift them up when they hit challenges,” says Charlene Walters, MBA, PhD, entrepreneurship coach, business branding mentor, and author of Launch Your Inner Entrepreneur.

“Female founders will continue to hit obstacles—it's a part of the game, and the important thing for them is to be able to regroup, come up with Plan B, C, D, etc., find the silver lining and not take setbacks or failure personally.”   

If you’re in a position to mentor women entrepreneurs, you could help them learn from your mistakes and avoid unnecessary pitfalls. “The easiest way to help them is by purchasing products, but mentoring women business owners will have a more lasting effect on their success,” explains Amy Edge, who specializes in operations and project management for entrepreneurs. “If you have the resources and skills to do so, share your expertise with women who are looking to get into business.” 

Conclusion

There are a lot of ways to help women entrepreneurs, so If you’re on the sidelines, the most important thing is to get involved and do something—not just for women but for the economy in general. “If small businesses are the backbone of the economy, women entrepreneurs are the skeletal system that holds everything together,” says Peterman.   

Lendio is committed to supporting women in business by offering tailored financial solutions. Learn more about business loans for women.