The newly-launched WE Fund Credit program offers affordable lines of credit targeted to women entrepreneurs in New York City
Women business owners generate $1.9 trillion in revenue and comprise 42% of all entrepreneurs. They’re poised for growth, but held back by limited access to credit. In fact, 70% of women entrepreneurs surveyed recently by New York City cited access to capital as a major challenge when starting and growing their companies.
Without capital, many of these business stall, as entrepreneurs delay hiring. Others rely on personal credit cards and payday lenders to grow their businesses, sometimes facing interest rates of more than 30 percent.
One new program can help. The newly established WE Fund Credit will provide $5 million to New York City’s women entrepreneurs through lines of credit up to $100,000.
“We know women are starting businesses at a higher rate than men. However, the biggest challenge in a business is not to start, it is to scale, and that’s not possible without the proper funding tools,” says WE NYC executive director Diana Franco. “WE Fund Credit is a flexible program designed to help women entrepreneurs move their businesses to the next level by providing a much-needed service that’s tailored to their needs.”
The credit lines, announced last week, are made possible by a private-public partnership between the New York City Department of Small Business Services, New York City Economic Development Corporation, Goldman Sachs 10,000 Small Businesses, Squarespace and Fundation.
The lines of credit will have an Annual Percentage Rate (A.P.R) of 12 percent, including fees. Business owners can apply through an online platform via the WE NYC website and can receive funds in as little as 24 hours. WE Fund Credit’s online process and flexible criteria make qualifying for credit easier and faster than through a traditional bank. Recipients will also receive help from the City throughout their application process.
Eligible applicants must head NYC-based companies that have been in business for at least one year. These companies must generate at least $50,000 in revenue annually. To be considered, entrepreneurs must have a FICO score of at least 620.
A soft launch of the program last month brought a $75,000 line of credit to Cathy LaCognata, a former stay-at-home-mom turned entrepreneur, according to the Wall Street Journal. She had previously depended on personal loans for her business but the new credit line gives her a new way to invest in her boutique gym, TFW Brooklyn, and pay for improvements such as renovations and new equipment.
“As a woman entrepreneur, it seems harder to get funding from a traditional bank,” LaCognata told women.nyc. “A line of credit, as opposed to a loan, allows me to only pay interest when I need funding.”
In the Wall Street Journal article, LaCognata added, “It’s a lot of work, being in this business and being good at it. But it’s so rewarding.”
Interested in the WE Fund Credit program? Click here to learn more and apply.
Photo: Small business owner Cathy LaCognata at her boutique gym in Brooklyn.
Photo credit: Kevin Hagen