The Easiest Working Capital Option for Black Business Women

How Black Women-owned Small Businesses Can Get Immediate Working Capital Without Debt or Liability.

Black women entrepreneurs have been starting businesses at the highest rate of any minority segment for several years. However, despite encouraging numbers, unfair societal roadblocks still hinder economic progress toward a level playing field. 

Three-quarters of businesses owned by Black women cite limited access to funds or investment as a barrier to success. At the same time, Black Women business owners are 20% less likely to fund their businesses using bank loans or traditional lender lines of credit. 

Instead, the lack of straightforward funding options makes alternative lending and fundraising sources the main go-to options, which can be expensive and risky. For example, credit cards, most often used as a funding source by Black business women, carry blistering interest rates thanks to post-pandemic interest rate hikes by the Federal Reserve. 

With bank funding and lines of credit drying up in an inflation economy possibly headed into recession, Black women-owned small businesses have to use the best, safest, least risky means available to increase cash flow and raise working capital. Read further, and we’ll tell you how Black Women entrepreneurs get immediate access to liquid cash flow and working capital by doing business with other businesses (and the government).

Record-breaking Business Openings Versus Social & Financial Injustice.

The 2020-2021 global pandemic resulted in lockdowns and restrictions on business and trade in a way that still negatively impacts the supply chain nearly three years later. Millions of women worldwide found themselves forced to find new ways to earn an income and turned to business as their answer.

  • Black women across the U.S. start businesses at six times the national average.
  • Black women constitute 60% of African-American-owned businesses.
  • Black women comprise 45% of all women of color-owned businesses in the USA.

Even though the number of businesses run by Black women (and other minority women segments) has grown by leaps and bounds in the past five years, some obstacles still stand. Black women face the same economic and business environment issues as all other demographics and challenges that non-Black people never deal with.

Goldman Sachs’ 2022 Black Womenomics Report confirms some of the stubborn systemic and social hurdles that still hamper business development for Black women entrepreneurs. For example, it states that BWOBs (Black Women-owned Businesses) generated around $700 million in business funding from 2018-2019, constituting only 0.25% of available funds.

  • Black women entrepreneurs run only 2% of businesses despite comprising 6% of the population.
  • Among single women in the African-American community, only 1/2 of a percent have their own business. In contrast, their historically and socially privileged single white male counterparts do so at a rate 24 times that.

Researchers insist the gap stems from disparities in education and income, but for the most part, assign the bulk of the blame on the following systemic, decades-old problems: 

  • Lack of access to working capital from banks and traditional lending institutions. For example, only 13% of Black women-owned businesses received the total amount of funding requested versus 40% of white-owned firms. Black entrepreneurs are three times more likely to avoid asking for additional funding due to an assumption that they will be denied based on race.
  • Lack of proactive community education on foundational personal finance strategy and resources.
  • Lack of helpful business financial information and guidance.

The fact that Black women entrepreneurs still fight so hard to succeed despite facing odds that would cause privileged populations to throw their hands up in frustration is a testament to the power and potential of Black businesswomen. 

Economists estimate that Black women-owned businesses would add an additional 525 billion dollars to the US GDP if those obstacles were removed and Black women were given the same financial resources and benefits as their peers. The big question, then, is…

 “How can Black women business owners can improve inbound cash flow and strengthen the working capital picture for their company starting right now, today?” 

As independent business owners, it is important to know how to generate revenue without getting buried in further debt or putting personal and business property into collateral status.

The Fastest, Safest Source of Working Capital for Black Women Entrepreneurs: Client Invoices!

Since most African-American women-owned companies rely on non-traditional sources for funding, those that do business with other businesses and with the government have an advantage in that they issue ‘merchant credit’ that allows them to conduct business now to be paid later by agreement with the client. 

The advantage for Black-owned B2B and B2G companies lies in that each business-to-business or business-to-government transaction results in a billing invoice (or ‘account receivable’) that represents the money owed by the client and contains the agreed-upon payment terms.

An invoice’s potential value can range from a few hundred dollars to hundreds of thousands, depending on the type of business goods and services delivered. Agreed-upon time frames are typically 30, 60, or 90 days to repay. Some larger companies are even demanding 120-day terms.

Inbound Cash Flow is the Beating Heart of Your Business – Unpaid Invoices Are a Blockage.

Small businesses have operated successfully under the merchant credit (buy now, pay later) paradigm for many years, and it works well enough in a decent economy. The challenge comes when the economy slows down, and revenue becomes scarcer in a tight business environment. When your clients have a more difficult time making payments on invoices.

Any economy with high inflation, swollen interest rates, and supply chain disruptions is a risky business environment when it comes to issuing invoices with extended payment terms. Yet, your small business can’t afford to allow prospects to fall into the hands of competitors merely because of an inability to wait a month or so. Therefore, you take the risk and live with the unease of watching invoice after invoice pile up, unpaid.

Because the economy is shaky, the likelihood of slow payment or default rises dramatically, as does the probability that you’ll be forced to take on the role of collection agent for your business to chase down, motivate, or threaten another business to get money. 

In this situation, the faster you can turn invoices into working capital in your bank account, the better off your company will be. With that in mind, there’s one Accelerated Invoice Payment Solution designed from the ground up to work perfectly for Black Women Entrepreneurs in need of working capital and who want to grow their business fearlessly.

Turn Client Invoices Into Working Capital and Get Paid Immediately with NowAccount.

For Black women-owned companies and other independent small business entrepreneurs needing a trustworthy, lightning-fast invoice payment option, NowAccount is the perfect solution.

  • NowAccount allows you to get paid immediately on client invoices, whether the terms are 30, 60, or 90 days. Your client can enjoy the extended payment terms you use to incentivize sales, and you get immediate cash flow and working capital deposited into your business account.
  • There are disguised charges or hidden fees. NowAccount is 100% transparent to you (while maintaining complete confidentiality between you and your invoice client). With the convenience of taking a credit card, you pay only a tiny one-time merchant fee.
  • NowAccount is not a loan and not invoice factoring, with distinct advantages over both.
    • Your balance sheet remains intact. Because it is not a loan, you can use NowAccount flawlessly even if you have an existing small business loan or line of credit. Using your Accelerated Invoice Payment System has no negative financial impact on your business.
    • Most invoice factoring companies keep some of your invoice funds (10 to 50%)  from you until after your client pays it off Remember that it could be months from when you need it. NowAccount does not hold back your invoice value. It’s your money to put to work in your business. Also, you’re not forced to turn over your entire client list and can select only those you wish to convert into immediate working capital.
  • You don’t need a perfect or lengthy business credit history with NowAccount. Your client’s ability to pay is the most critical factor. You also do not need personal or business collateral to participate.
  • If your client delays payment or defaults, neither you nor your business will be liable for collection. You can relax and enjoy doing what you love in your company.

Do not allow stacks of unpaid, extended payment term invoices to clog up the lifeblood of your small business. With funding being the number one concern among Black Women-owned companies, the fastest, safest, least risky, and best way to increase cash flow and working capital is to convert existing client invoices into money deposited directly into the company business account. 

Turn your invoices into assets using NowAccount. Get started today using the Simple 4-Step Process.