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Small Business Loans for Women

By Elise Moores Managing Editor at Fast Capital 360 Reviewed By Mike Lucas

There are more than 1 million women-owned businesses in the U.S., according to data from the U.S. Census, employing more than 10 million workers and reporting nearly $1.8 trillion in “sales, shipments, receipts or revenue.”

While women represent a significant percentage of small business owners, they often experience difficulty getting the financing they need to sustain and grow their businesses. According to a 2020 Forbes report, women entrepreneurs received 36% less in funding than men. 

But the following business loans for women can help you acquire the capital you need to succeed. 

We’ll break down your top choices. We’ll also explore what you’ll need to apply and qualify for some of the best small business loans for women. In addition to loans, there are many grants, mentorship programs and resources exclusively for women business owners.

 


The Best Small Business Loans for Women

A woman works at her laptop and sees that she’s been approved for a small business loan for women.

Conventional Bank Business Loans for Women

When you’re searching for women owned business loans, your first impulse might be to apply for financing through a bank or credit union. These institutions offer: 

  • Higher funding amounts
  • Long terms
  • Competitive rates

However, to obtain these favorable terms, lenders have strict requirements. Many call for borrowers to have a credit score of 620 or higher and an established business and credit history. 

If these standards put a business loan out of reach, don’t get discouraged. Female entrepreneurs still have financing options.

SBA Loans for Women: Small Business Government-Backed Loans

While the SBA itself doesn’t provide funding, it works with a group of participating lenders. The loans are partially guaranteed by the Small Business Administration and are offered to small business owners, including women entrepreneurs. This guarantee lowers the risk lenders assume when working with small business owners. As a result, participating lenders are able to consider more applicants and offer more competitive terms.

To qualify for any of the SBA loans for women, you must meet the administration’s standards for small business size.

SBA 7(a) Loans

A standard SBA 7(a) loan offers up to $5 million in funding with a maximum 25-year term. Borrowers can use this financing for various purposes, including working capital, real estate purchases and renovation and equipment purchases. The maximum interest rate is the current prime rate plus 4.75%.

SBA 504 Loans

SBA 504 loans provide long-term, fixed-rate financing for assets, such as real estate or equipment. If you apply for an SBA 504 loan, note that the structure varies from other SBA loans. The funding has 2 sources. A certified development company (CDC) — an SBA-certified and regulated nonprofit corporation — will fund a portion of the loan (usually 40%), and the SBA guarantees that financing. The other portion (50%) will come from another lender. The borrower will be required to make a 10% down payment; in some instances, it could be 20%.

These SBA loans for women (and all other borrowers) have a maximum funding amount of $5 million.

SBA Express Loans

SBA Express Loans are processed within 36 hours after you submit your application, making this type of small business loan for women a good option if your funding needs are time-sensitive. Borrowers can be approved for a maximum $350,000 funding amount, with a maximum interest rate of the prime rate plus 6.5%. The SBA guarantees 50% of the funding.

If you use the financing for real estate, you can qualify for a 25-year term.

SBA Microloans

These loans provide smaller amounts of funding, ranging from $500 to $50,000, but the average approved amount is $14,000. Nonprofit, community organizations process SBA microloan applications, as opposed to conventional and online lenders. Once they’re approved, borrowers can use funds for various business costs including working capital, equipment or inventory purchases, which makes them ideal for startup loans for women owned businesses. Because this financing is accessible to first-time business owners, it’s ideal for women-owned businesses as well as veteran-owned and minority-owned ventures.

  • Other startup business loan options for women include the following:

    • Personal loans: This financing can provide capital to new business owners with a solid personal credit score and history.
    • Investors and investment groups: Angel investors and venture capitalists provide financing in exchange for equity in your business.
    • Business credit cards: A business credit card is easier to qualify for than a business loan, and making timely payments can help bolster your business credit history. However, you won’t get as large a funding amount, making it a better startup financing option if you don’t need a huge sum in general or need a smaller amount to bridge a financing gap.

 

Related: Getting SBA Loans for Bad Credit: Here Are Tips and Alternatives

 


Best Small Business Loans for Women from Alternative Lenders

Alternative or online lenders offer financing options for women-owned and all other businesses. 

Alternative lenders are a good choice for business owners that haven’t been in business for long (2 years or fewer) and are still building their credit history and credit scores. Note that with less strict requirements there’s more potential risk for lenders. The financing can come with higher rates or shorter terms compared with traditional lenders.

Short-Term Business Loans

For projects that will take less than 2 years to complete, consider a short-term loan, which provides women-owned businesses with upfront working capital. This loan type is best suited to fund large purchase orders, support healthy cash flow, undertake building upgrades and finance any seasonal preparations.

  • Do You Qualify?

    Based on previously approved Fast Capital 360 borrowers, you’re likely to qualify for a short-term business loan if:

    • You’ve been in business 1+ years
    • Your annual revenue is $75,000 or more
    • You have a credit score of 540+

    Apply now

Business Line of Credit

Purchase and payment flexibility are the main features that make a business line of credit so appealing if you’re searching for financing for women owned businesses. A business line of credit can be used much like a credit card — access funds when you need them and pay down your debt in regular increments. Lines of credit limits are often higher than credit cards, with repayment terms typically falling within the range of 6 months to 3 years.

  • Do You Qualify?

    Based on previously approved Fast Capital 360 borrowers, you’re likely to qualify if:

    • You’ve been in business at least 1 year 
    • Your annual revenue is $200,000 or more
    • You have a credit score of 560+

    Apply now

Merchant Cash Advance

With this form of business funding for women, a borrower receives an advance on future sales in exchange for financing. Funds are often received on the same day as approval. Lenders then receive a percentage of daily or weekly sales (known as a “holdback”) until the advance is repaid. Terms can range from 3 to 24 months.

  • Do You Qualify?

    Based on previously approved Fast Capital 360 borrowers, you’re likely to qualify if:

    • You’ve been in business for 4 months or longer
    • You have a credit score of 500
    • Your business’s annual revenue is at least $100,000 

    Apply now

Accounts Receivable Financing

Waiting on customers to pay their invoices can lead to a cash flow gap, but accounts receivable financing can help you cover expenses during those times. Lenders will finance select invoices for a percentage of their value (which could be 80% or 90%)

  • Do You Qualify?

    Based on previously approved Fast Capital 360 borrower, you’re likely to qualify if:

    • You’ve been in business for at least 1 year
    • Your credit score is 600+
    • Annual revenue is at least $150,000

    Apply now


How to Get a Small Business Loan for Women

Armed with knowledge about your financing options, it’s time to apply. Make sure you read each lender’s website to ensure you have all of the documents and information you need; this can include the following:

  • Your personal information and information about any other owners/business partners
  • Bank statements (from the last several months or even years, depending on the lender’s requirements)
  • Personal and business tax returns
  • Business financial documents including profit and loss statements and balance sheets

Applying with a Bank

A bank or credit union has a lengthy application and approval process; it can take several weeks before your application is approved and you receive funding. You might have to meet with lending representatives in person and submit a business loan proposal.

Applying with an Alternative Lender

Many alternative lenders’ application process is completed online within minutes — including Fast Capital 360’s. You’ll have to submit fewer documents than you do with traditional lenders, but alternative/online lenders will still need personal information, several months’ of bank statements and bank account information. Loan approval or denial is decided in a matter of hours, and if your business loan for women is approved, you could receive funding as quickly as the same day.


Top Small Business Grants for Women

In addition to lender financing, women entrepreneurs can also apply for grant funding to fuel their business ventures.

Here are some of the best small business grants for women:

Cartier Women’s Initiative

Since 2006, Cartier has run this grant program alongside the internationally renowned INSEAD Business School. This grant is open to women business owners from around the globe who are working to address challenges facing society and bring about change in the world.

Seven top winners, referred to as laureates, are awarded $100,000, and 14 finalists receive $30,000. Additionally, all finalists benefit from networking opportunities, business coaching sessions and ongoing support to continue to grow their business, including a scholarship to attend a 6-day entrepreneurship education program sponsored by INSEAD. During the Awards Week, finalists also have a chance to promote their brand on a global scale by interviewing with the international press.

Cartier women's initiative grant

The Amber Grant for Women

Started in 1998 to honor Amber Wigdahl, a burgeoning entrepreneur who passed away at 19, the Amber Grant for Women is managed by WomensNet to preserve her memory.

Each month, WomensNet selects one woman-run business to receive a $10,000 Amber Grant. At the end of the year, one of these dozen recipients will win $25,000. WomensNet also adds an additional community element by allowing visitors to vote for which candidates they’d like to see awarded the annual grant.

Amber grant for women business owners


Resources for Women Entrepreneurs

Beyond securing the funds needed to drive your business forward, you need access to quality resources. Given the challenges that women entrepreneurs face in today’s market, there are specific networks and mentorship programs designed especially to support their growth.

Minority Business Development Agency

A part of the U.S. Department of Commerce, the Minority Business Development Agency has local offices that assist underserved Americans across the country. They offer one-on-one financial counseling. They also guide female entrepreneurs and minority business owners, including African Americans and Hispanics, in gathering the documentation they need to apply for grants. Such grants could serve as alternatives to small business loans for female minorities.

Office of Women’s Business Ownership

The Office of Women’s Business Ownership (WBO) was created to support women in their entrepreneurial endeavors. The WBO oversees a network of more than 100 Women’s Business Centers across the country, helping women transform ideas and start-ups into consistent, profitable businesses.

Like the MBDA, Women’s Business Centers exist as a means to defend, advocate and care for women-run businesses through mentorship, education and other forms of assistance. They also help businesses apply for grants and loans.

National Association of Women Business Owners

The National Association of Women Business Owners (NAWBO) represents the needs and interests of women-run businesses. The goal of NAWBO is to increase the footprint, visibility and opportunities for women-owned businesses.

This dues-based organization betters women entrepreneurship by leading efforts to augment public policies, creating partnerships with non-profit and corporate organizations and providing a nationwide network of business owners.

WE Fund Crowd

Running a business in New York City comes with a unique set of challenges for any entrepreneur. WE Fund Crowd recognizes this and actively seeks to support women-run organizations. WE NYC accomplishes its goals by partnering with crowdfunding loan platform Kiva and pledging up to $1,000 for any crowdfunding campaign.

Also, WE Fund Crowd shows business owners how to optimize their crowdfunding campaigns to maximize their exposure, marketing and number of backers.

Awesome Women Entrepreneurs

There are thousands of networking groups suited to support professionals of every background, gender, alma mater and industry. Awesome Women Entrepreneurs (AWE) is different, though. They focus solely on being a social networking group. They take the best parts of networking events — getting to know your peers and mentors over drinks and food in a relaxed atmosphere — and amplify it.

Beyond the in-person events, AWE adds value to its Washington, D.C. metro-area members by providing monthly Mastermind programs, weekly podcasts, private Facebook groups and a members-only directory with online access.

SCORE

SCORE offers mentoring, on-demand webinars and courses. They also have a digital library and sponsor local networking and educational events. You can find your local chapter through the SCORE website.

Association of Women’s Business Centers

For more than 20 years, the Association of Women’s Business Centers has supported more than 145,000 members through 100 locations. The association hosts an annual conference to support women small business owners. They also provide training webinars and offer helpful online resources for members.

National Women’s Business Council

Another arm of the SBA, the National Women’s Business Council offers opportunities for women entrepreneurs to capitalize on the data it analyzes and disperses. Access news and events designed for women business owners, such as the Small Business Roundtable Series. Sample topics include entrepreneurship for rural women and methods for eliminating gender-based funding gaps.

 


Business Loans for Women: Frequently Asked Questions

Why do women get denied loans at a higher rate than men?

Why Do Women Owned Businesses Get Denied Loans at Such High Rates? 

Although female entrepreneurship is on the rise, women still are approved for lower funding amounts and shorter loan terms than men are. There are a variety of factors that contribute to this situation:

Lower Credit Scores

Women business owners’ credit scores, on average, are lower than men’s — 597 vs. 620 in 2020, according to Biz2Credit. A variety of factors contribute to this gap, including differences in men’s and women’s wages and business revenues.

Lower Revenue

Women-owned businesses report lower revenues than men-owned businesses. A CNBC report attributes this to men being in business for longer amounts of time and benefiting from network connections with people in other industries, such as IT and construction.

Gender Bias

In 2019 HSBC Private Banking released the results of a survey that stated 46% of the responding women entrepreneurs in the U.S. reported fielding questions about their personal lives and credibility as business owners when they tried to acquire funding. In contrast, men were asked about their business ideas when they sought business financing.

Are Some Small Business Loans Only for Women?

When you’re searching for business funding for women, you won’t find any financing exclusively categorized as “women owned business loans,” “business loans for moms” or even loans specifically for women in racial minority groups. Business financing from banks, credit unions, alternative lenders and SBA-backed funding are open to any applicants, regardless of sex or gender identity. However, there are grants and some mentorship groups that are geared toward female entrepreneurs.

Can Women Get Business Loans With Bad Credit?

Traditional and alternative lenders offer a variety of financing options. However, if you’re looking for funding and have less-than-ideal credit, you might worry that you won’t be able to find the capital you need. While some lenders and financing options require a good to excellent credit score, some small business loans are still available for women with bad credit. Your potential choices include

  • Merchant Cash Advance
  • Accounts Receivable Financing

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