As women, we often juggle multiple roles as professionals, caretakers, leaders, dreamers. But, many of us have a passion or a skill that could grow into something bigger. Whether it’s crafting, consulting, baking, or designing, we often dream about turning that hobby into a side hustle. Yet, the biggest hurdle is usually funding. And that’s where the magic of SBA loans comes in.
You don’t need a millionaire’s bank account to start your own business. What you do need is an opportunity—and Small Business Administration loans can be just that.
If you’re unfamiliar, the SBA is a government agency that helps small businesses and entrepreneurs get access to financing through different loan programs. And before you start panicking, let me assure you: After working in the SBA business, I know these loans are designed to be accessible for people who don’t have perfect credit or a huge stack of cash to start with. The SBA itself doesn’t directly lend you money, but it works with banks and lenders to guarantee loans in case of a default. This means the bank has less exposure to loss and you have a better shot at getting approved.
For a woman thinking about starting a side hustle, the most relevant type of SBA loan is probably the SBA Microloan. These loans are usually up to $50,000, and while that may not sound like a fortune, it’s more than enough to get a side business off the ground. It can be the perfect way to get that capital infusion without feeling like you’re drowning in debt.
Before diving into how SBA loans work, think about your side hustle idea. Whether it’s making eco-friendly candles, starting a fitness coaching business, selling your artwork online, or offering freelance marketing services, the key is to have a clear vision. Don’t overthink it. What do you love doing? What are you good at? That’s your starting point.
The beauty of a side hustle is that it doesn’t need to take over your life. You can still work your 9-to-5 job while building something of your own. The goal is to create a source of income that also aligns with your passions. Once you know what that is, you’re ready to move forward with financing. But understand that the key word is income. You shouldn’t turn a passion into a business if you can’t monetize it—that’s a hobby, not a side hustle.
Why not dip into my savings or max out your credit card?” Sure, that’s an option, but if you’ve ever dealt with the interest rates on credit cards, you know they’re not pretty. SBA loans come with much lower interest rates than most personal loans or credit cards, which means you’re not sinking in a sea of debt while trying to make your side hustle float. And while you can use some of your savings for your new side gig, draining your entire account is not a smart financial decision.
Another great thing about SBA loans is that they have flexible repayment terms, which is important when you’re starting something part time and don’t want the pressure of huge monthly payments right off the bat. Whether you need money to buy equipment, invest in materials, or build a website, an SBA loan can give you that cushion to get started.
So, you’ve got your side hustle idea ready to go and you’re feeling inspired to apply for an SBA loan. Now what?
First, you need to get your ducks in a row. The SBA, while helpful, is not a financial institution. Thus, you have to find a bank or an SBA lender to finance your business, and they’ll want to see your plan. Here are a few things you need:
A business plan: Your business plan should lay out what your side hustle is, who your customers are, how much money you need, and most importantly, how you plan to pay the loan back. Think of it as a roadmap, not just for the bank, but for yourself.
Financial projections: Even if you’re just starting your side hustle, the SBA will want to know how you plan to make money. Include estimated expenses, income, and growth potential. The more prepared you are, the better your chances of being approved.
If you have no idea how to do a business plan or financial projections, hire an independent contractor from sites like Fiverr who will do the work for you. But make sure the person is reputable with great ratings.
Personal credit: While SBA loans are more forgiving than traditional loans, they still take your credit history into account. If your credit score isn’t perfect, don’t stress—it’s not the only factor, but it’s something to be aware of. Also be aware that SBA loans require a personal guarantee from all borrowers.
Collateral: Depending on the loan, you may need to offer collateral, like equipment or other assets if available. But don’t worry, microloans often don’t require collateral, making them a great option for a new side hustle.
Once you’ve secured your SBA loan, the fun part begins: building your business. Whether you’re using the loan to purchase inventory, rent a workspace, or launch your online store, it’s all about taking that first step. Money is a tool to help you grow, but the real success comes from your commitment to making it happen.
One piece of advice: spend wisely. It’s tempting to splurge on everything you think you need, but focus on what will give you the best return on investment. If your business relies on marketing, invest in advertising or building a killer website. If it’s product-based, use the loan to perfect your offering.
One thing you can’t forget about side hustles is they require time and energy, and it’s a long-term game. Some days, you’ll feel unstoppable, and other days, you might wonder why you’re putting in the extra hours. The key is to stay consistent, keep learning, and remember you’re building something that could one day be your main source of income, or at least a significant contributor.
What’s most empowering about using an SBA loan to start a side hustle is the independence it brings. This isn’t just about making extra money—though that’s certainly a bonus. It’s about taking control of your financial future and becoming financially independent. You’re investing in yourself, and that’s something no one can take away. And with the backing of an SBA loan, you’re more likely to secure that side hustle and be on your way to financial freedom.
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