subject: Safe Funding Sources For Women In Business Versus Scams [print this page] If you are a female in business, then you need to know that some funding sources target entrepreneurs in good ways, but others, known as scams, target women in a bad way. Of course there are traditional loans, scholarships, and invoice factoring. And then there are scams.
The Small Business Administration (SBA)'s Office of Women's Business Ownership helps level the playing field for women in business. And many women are entrepreneurs facing unique obstacles. This SBA office offers to encourage, inspire, teach and counsel, and also offers a Hot List of outside resources.
But women must also be careful and watch out for scams -- seminars and email pitches that offer a financial sales pitch, infomercials that look like real television programs with celebrities, and telephone calls directed at female entrepreneurs, These are mostly scams that are intended to take your money. Never give out your bank account, social security, or credit card numbers.
If you are a female business owner and believe that you have been scammed, or if anything looks suspicious, contact the Federal Trade Commission. it is the federal government's complaint department. Or locate the National Fraud Information Center online, a division of the non-profit National Consumers League, and a website dedicated to educating consumers about scams and avoiding them.
A safe bet for women who are seeking to fund their business is accounts receivable factoring. Invoice factoring is an age old practice that has been used by businesses worldwide for more than 4000 years.
Factoring is easy to understand. Company A delivers goods or services to Company B and invoices Company B. A factoring company then buys this invoice from Company A at a discounted rate, depositing this amount in Company A's bank. Company B then pays the factoring company for the full amount of the invoice.
There is one very important thing to remember... You should employ factoring before a situation where your company becomes too leveraged. But we all know things do happen -- everything from bad luck to careless spending, or even just a bad economy. It would be close to impossible for the owner to find a factoring company to work with. With invoice factoring or receivables factoring, you are usually selling your invoices to a factoring company. A lien ahead of the factoring company's lien means that if something goes wrong, the bank could step ahead of the factoring company for payment.
