Wells Fargo woos women entrepreneurs: $1 billion in loans up for grabs.

Women business owners have always known that they were worth investing in. Now they have a chance to prove it

Wells Fargo Bank, a $51 billion commercial bank, has put $1 billion into a loan fund and teamed up with the National Association of Women Business Owners (NAWBO) to hunt for creditworthy female entrepreneurs. The Washington-based NAWBO has 10,000 members nationwide; it has no breakdown on the ethnic composition of its members.

The Wells Fargo fund offers loans from $5,000 to $100,000. The money is available for businesses nationwide, though the bank is based in San Francisco.

Unlike many loan programs that shuttle black and other women of color into a "minority" program, the Wells Fargo funds are available to qualified female applicants of all races.

"It's a good opportunity for black female entrepreneurs who keep getting shunned by big banks," says Gene Hale, president of the African American Chamber of Commerce in Los Angeles. "Black women need to pound down the doors every week. They are entitled to their fair share."

The qualifications are tough but fair. Women business owners must have a good personal and business credit record and have been in business for two years, or show an equivalent period of related experience. They must own a profitable business, have a bank account for the business, and have kept bankruptcy at bay for the past 10 years.

The good news: The loans are unsecured (no collateral) and revolving, with a variable interest rate based on the prime rate. The one-page application form does not require tax returns or financial statements.

The program was launched soon after NAWBO's landmark survey revealed that women-owned firms employed 35% more workers than Fortune 500 companies. Some 7.7 million women-owned firms employ 15.5 million workers, and generate $1.4 trillion in sales.

While most businesses are like to fail within three years of start-up, women-owned business have a much better survival rate, according to NAWBO.

In addition, women entrepreneurs are as creditworthy as the typical U.S. firm: 92% of women business owners pay their bills within 30 days of the due date. Of all U.S. firms, 93.6% pay within the same period.

However, two-thirds of women business owners reported difficulties in working with their financial institutions, which is 22% higher than small firms. NAWBO also found that one-third of women business owners say they perceived some degree of discrimination from their financial institution because of their gender.

Historically, women and minority entrepreneurs have sought minimal sums of money - around $10,000 or $50,000 - to launch or expand their businesses. Bankers consider these amounts small potatoes. The paperwork involved costs more than the interest collected on such small loans.

Terri Dial, executive vice president of business banking at Wells Fargo, explains, "When you're borrowing a million dollars, there are a lot of people to talk to; but when you need a $10,000 loan, it's hard to find a lender."

Now Wells Fargo, the largest lender to small business, has cut the cost of such loans by automating the process, screening for promising recipients and sending out a direct mailing to prequalified loan applicants.

To apply for loans under $25,000, call 800-359-3557, ext. 120. The minimum loan is $5,000. Loan applications for higher amounts should be mailed or faxed. For application forms, write to 1413 K St. NW, Suite 637, Washington, DC 20005; or you can fax your request to 301-608-2596.