Financing Your Mompreneur Business

Even though it's not usually advised, many mompreneurs choose to finance their companies using their credit cards. It's hard to resist the low-interest (or even no-interest) incentives that are in your daily mail. But while rates may start low, they inevitably creep up and spin out of control.

If you go this route, proceed with caution and be sure to move your money when interest rates spike. No matter how successful the business, it'll be difficult to catch up if interest rates are sky-high.

The next route for mompreneurs to take tends to be borrowing from friends or family. It makes sense: You know them, and they believe in you.

If you decide to pursue this option, be sure to do it legally and with the proper documentation. Are these people able to afford the risk? Will they need to be paid back right away? How would you feel if you couldn't re-pay the investment?

Experts agree that you should consider getting the financing in the form of a loan instead of equity, as it could later affect your attempts to raise financing from professional investors.

Still need more money?

Then it may be time to approach outside investors or banks. Consider getting professional (and free) advice from someone at SCORE about how and who to approach. This is also when you'll want to take advantage of that strong relationship you have with your local banker (you do have one, right?). Local banks are often easier to get a loan from than large, commercial branches.

Next on the funding list are angel investors and venture capitalists. Both of these sources are looking for a higher return on their money than they can get from traditional investments. They're more likely to take a higher percentage of your business than other investors (more like 25%) and retain tighter control. An angel investor is more likely to have experience and interest in your industry whereas the venture capitalist will invest in any venture that looks promising.

You should also consider investigating government programs. There are a variety of loans you could consider. For instance, the SBA has a program called SBA Express where you can get up to $150,000 without all the paperwork associated with traditional SBA loans. And you get an answer within 36 hours. In fact, there are many special opportunities for women and minorities. Visit the SBA site for more information.

Here's my final advice to you: Remember, in the eyes of a lender, you're simply a businessperson looking for financing. So make your presentations professional and don't show up with child in tow. You'll need to prove that you're serious about your business and that you can juggle work and family.

Learn from other successful women business owners about how they accomplished their goals -- it's best to learn from others' mistakes so you don't have to make them. No matter which route you take, take your business seriously. Be committed, be passionate, and stay true to why you want to accomplish success in your business.