The impact women have on the U.S. economy is growing every year. In fact, women small business owners are one of the fastest-growing segments of small businesses in the country.
Despite the gains women are making in the economy, there’s room for improvement for female business owners. That’s why many loan programs are making a concerted effort to get women to apply, and some have set aside funds for women, minorities, and those in underrepresented groups.
Given how these loans can sometimes take months to get approval, it’s best to research long before you need access to small business financing. Remember, loans—unlike grants—require repayment, so you’ll need to demonstrate your business’ ability to make timely periodic payments to help document your business’ creditworthiness.
Note: There generally aren’t “women loans,” and you won’t often find the government or other entities offering loans designed only for women. Instead, there are places on the average application to indicate your personal information, and this may be used to approve you for funds if they have been set aside specifically for traditionally disadvantaged groups—like women. The loan process, name of the loan, and the application won’t look different for a woman than any other applicant.
Be aware though, you will still need to meet all the other creditworthiness qualifications for loan approval.
Funding for Women-Owned Small Businesses
Funding for many types of businesses run by women comes in all shapes and sizes. A new business might consider crowdfunding. An existing business could explore loan options. A startup might bring on investors.
Let’s explore those options.
Types of Small Business Loans for Women
Here are some business funding options women-owned businesses can start looking into now, so you’re ready to go when it’s time to fund the next stage of business growth.
1. U.S. Small Business Administration Small Business Loans
The government agency, the Small Business Administration, offers several loans to business owners, including the 7(a) and 504, as well as SBA microloans.
To be eligible for SBA loans, you must be a U.S.-based, for-profit business of a certain size that has an owner that is materially invested in the business. SBA loans require the businesses to have exhausted all other methods of funding first. You’ll also need acceptable personal credit and a good business credit history. Annual revenue matters, as well.
SBA loan programs can be used for a number of business expenses, including hiring staff, real estate, and equipment, and could be a good option for a working capital loan.
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2. Rural Business and Industrial Loans
According to the GovLoans.gov website, “The purpose of the [Rural] Business & Industrial (B&I) Guaranteed Loan Program is to improve, develop, or finance business, industry, and employment and improve the economic and environmental climate in rural communities.”
This is technically a loan for cooperative agencies (profit or non-profit), an individual, a tribe, or a public body. To qualify, established businesses or organizations must serve a rural area and:
- Hire workers
- Improve the economic or environmental climate around you
- Promote clean water for aquaculture, or
- Promote renewable energy solutions
To apply for this lending opportunity, visit the USDA Rural Development office near you.
3. USDA (Farm Services Administration–FSA) Women Farmers and Ranchers
The FSA has a renewed focus on giving even more money to underserved farmers and ranchers, through several programs. These are open to most small farmers, but they do put a focus on providing funds to the underserved—including women. These long-term financing programs include:
- Operating and Farm Ownership Microloan program
- Youth Loan
- Guaranteed Loans
- Direct Operating Loans
- Direct Farm Ownership Loans
The best way to know which program best suits your farm or agricultural business is to partner with your local FSA office. It can point you in the right direction for your business size, goals, and method of farming (organic, for example.)
4. Business Lines of Credit
Sometimes you don’t need all your capital at once. Maybe your business needs $10,000 for a renovation on your commercial property now, and $25,000 down the road for expansion. That’s when it’s time to consider a business line of credit, like the one Fundbox offers. It can keep cash flow steady and get you access to capital when you need it.
5. P2P Loans
Another option for borrowing is by getting money from private investors. Peer-to-peer loans have come a long way since they first hit the scene almost a decade ago. Whether you choose to look for money through a more service-minded platform like Kiva or pick one that’s aimed to serve a larger business landscape, getting funds directly from individual lenders is easier than it has ever been before. They are open to a wider range of credit scores, those with only established personal credit, and those with bad credit.
6. Private Small Business Loans
In addition to the SBA, there are private, for-profit businesses that will offer financing to women business owners. Like SBA loans, you will need to have good to excellent credit, a reliable business history, a business plan for how you will spend the loan proceeds, and a projection of profits to show that you can pay the money back. Collateral may be required, as well.
Where do you find these small business loans for women? You might want to start with the banks and financial institutions you already do business with, such as your mortgage holder or auto lender. These traditional lenders have much of your information on file and already know you as a customer. They may sometimes offer you a lower interest rate as a reward for your loyalty.
Another way is to search for online lenders, much like you would a credit card. Small business loans come in all sizes, from a few thousand dollars to a million or more. Realistically, if your business is modest, young, and new to borrowing money, you’ll find a smaller amount easier to obtain.
These online, alternative lenders will also lend to many businesses that traditional lenders like the bank or the SBA may not. Lenders like Kapitus will also approve a small loan amount than many traditional lenders will and often deal with loan amounts in the $20,000 to $50,000 range. In other words, even if you have less-than-perfect credit, you may qualify, provided you can demonstrate a healthy business and the ability to make periodic payments.
7. Business Credit Cards
You might also consider business credit cards. As you show satisfactory progress in paying back what you borrow and raise your business and personal credit score, the doors of opportunity for more business financing options should open. And a rewards card can help you earn perks when you spend money on your business.
8. Equipment Financing
If your business uses equipment, you can take out an equipment loan and use the machinery or vehicle you’re buying as collateral for the loan, which may help you get a lower interest rate with lenders like LendSpark.
9. Cash Advance
If your credit’s not great and you don’t qualify for any of the options we’ve already discussed, look at a cash advance. It’s essentially an advance on your future sales. Companies like Credibly can advance you up to $400,000 even if your credit isn’t great and you haven’t been in business long.
These are just a drop in the bucket of the financing options you have. Download the Nav mobile app to see what you qualify for.
Angel Investors and Venture Capitalists Geared Towards Women
There’s another kind of funding to consider: equity financing, such as angel investing and venture capital. These can sometimes get small business owners a much larger amount, without the same requirements as a traditional bank or credit union. Be prepared to market yourself to convince investors that your business is a worthy investment. You may also have to give up a little control of your company, as well as equity—depending on the type of funding you choose.
Here are some options with an eye on developing women-owned businesses.
1. The Pink Ceiling
This business incubator is aimed at businesses owned by women or that serve women. The “Pinkubator,” as it’s called, accepts pitches from small business owners on an ongoing basis, and the application form is quite simple. If Cindy and her team like what they see, you may be eligible to partner with her network for investors.
2. 37 Angels Community of Women Investors
The 37 Angels community offers startup bootcamps, education, and a robust network of female startup founders and investors.
3. The Women’s Capital Connection
The Women’s Capital Connection provides angel investment to women-owned businesses. The group works to provide high ROI for investors and access to early-stage financing for “high-potential women-led businesses and entrepreneurs.”
4. BELLE Capital USA
Belle Capital is a female-focused angel investment group is specifically looking for early-stage U.S. businesses in underserved capital markets in the following industries:
- digital/mobile/internet (IT)
- technology-enabled products and services
- life sciences/medical devices/health I.T. (Digital Health)
Other female entrepreneurs may be considered for financing.
5. Female Founders Fund
Driven by the belief that women make better entrepreneurs (but receive less overall funding), Female Founders Fund is actively looking to fund those big ideas from women-owned businesses. They focus on financing institutional seed-stage companies, but will also make small, supporting investments to small business owners outside these parameters. They are specifically interested in B2B and B2C marketplaces, e-commerce brands, web-enabled services, and tech platforms.
How to Apply for a Business Loan as a Woman-Owned Business
Each lender will have slightly different requirements for applying. Some may have short and sweet applications, while others, particularly banks and SBA lenders, may ask for more information and may even require you to come into a bank branch to apply.
Review the criteria before applying. You may need a certain minimum credit score and/or annual revenues, as well as a few years in business.
The application will ask questions about both your business and you as the business owner.
Once you’ve been approved for a loan, review the loan agreement, which will tell you how much money you’re approved for, your interest rate, and what your monthly payments will be. Sign the document and your funds will soon be deposited.
Grants for Women-Owned Businesses
Business loans for women may be more common and easier to get, but you shouldn’t give up hope of getting some of that free money just yet. It’s still worth looking into small business grants for women offered by nonprofit organizations and corporations.
The longstanding Amber Grant (it was formed in 1998) gives away at least $30,000 each month to female entrepreneurs and an additional two $25,000 year-end grants. Judges look for businesses with “heart” and say that no dream is to big or too small to qualify as a grant winner.
Other Resources for Women-Owned Small Businesses
In addition to these loans, investments, and grants available to female entrepreneurs, there are also resources that can provide mentorship, assistance in creating business plans, and networking opportunities.
1. Women’s Business Centers
The SBA offers many resources, including Women Business Centers, located nationwide. Each offers female entrepreneurs business counseling and training, as well as access to capital. You can also find networking events and business accelerators here.
2. National Women’s Business Council
The National Women’s Business Council fights for women entrepreneurs on Capitol Hill. It also offers webinars and roundtable discussions to further your business knowledge.
3. National Association of Women Business Owners
The National Association of Women Business Owners (NAWBO) is a dues-based organization that provides opportunities for networking and professional development.
4. SBA 8(a) Business Development Program
While not specifically aimed at women (and not a loan), this program offers guidance for “small businesses owned by socially and economically disadvantaged people or entities.” Presumably, this includes women, and the program is marketed to women’s business groups as well as minorities. To apply for an 8(a) status, you’ll want to go through the certification site (just be sure to have your new SAM number first.)
Once accepted and given 8(a) status, you’ll enjoy many benefits, such as:
Eligibility to compete for set-aside government contracts, mentoring, access to a business opportunity specialist, and assistance with various business specialties such as marketing and technology.
To get started with any of the SBA programs start by contacting your local office. Businesses that work alongside their local chapter have better results in getting funding and resources than those that don’t. This is a good option for even those with less-than-perfect credit who need advice on business ownership.
5. Office of Women’s Business Ownership
The Office of Women’s Business Ownership has the mission to “enable and empower women entrepreneurs through advocacy, outreach, education, and support.” It does this by offering business training and counseling, access to credit and capital, and marketing opportunities, including federal contracts.
How to Fund a Startup as a Woman
Just like any business owner, you as a woman need to make the decision on what’s best for your business. That means doing your due diligence to decide which of these financing solutions is the best fit.
If you don’t mind paying back a loan, look for one with low interest. But plan in advance: some loans, like those offered through a bank or the SBA, may take weeks to process and fund, while online loans may approve you the same day and put funds in your bank account the next business day.
If you don’t want to pay back financing and see the benefit of bringing on investors, explore angel investment and venture capital. Or apply for grants or crowdfunding.
Whichever path you choose, make sure to use those funds to grow your business and help it thrive.
What could your business do with $10,000?
Check out Nav's Small Business Grant now to find out how your business could win $10,000.
Do women’s small business government loans exist?
While most loans are open to all qualifying businesses, not just women entrepreneurs, it might pay to become a certified women-owned business. With this certification, you may be considered for government projects that are set aside for certified female-owned businesses.
Should I consider peer-to-peer lending for women?
Peer-to-peer lending (also known as P2P) is a good funding option for many businesses, even those with new or lower credit scores who may not be interested in higher-cost term loans. Because lenders can select the type of projects they align with, they might be attracted to the idea of helping a woman-owned business and even offer more generous repayment terms for short-term loans.
Are business loans harder for women to get?
Women who run businesses are just as qualified for business loans as men, though there are some loan programs that aim to level the playing field by giving preference to women and minorities who apply.
Can women get a business loan with bad credit?
There are loans for businesses with bad credit, though they generally have higher interest rates.
What does it take to qualify for a business loan as a woman-owned business?
Generally, lenders look for applicants to have a certain credit score, annual revenues, and time in business.
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Nav connects you to business financing options that you are more likely to qualify for based on your business needs and credit — all without a hard credit pull.
This article was originally written on September 23, 2019 and updated on January 13, 2022.
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What is the easiest SBA loan to get? SBA microloans are one of the easiest SBA loans to get. SBA microloans are issued by nonprofit community lenders, who set their own rates and eligibility requirements (with some guidance from the SBA).Where's the easiest place for a small business loan? ›
- OnDeck: Best for Short-term Loans.
- Lendio: Best for a Lender Comparison Site.
- Kabbage: Best for Lines of Credit Backed by American Express.
- BlueVine: Best for Flexible Lines of Credit.
- National Funding: Best for Small- to Mid-sized Businesses.
- Fundbox: Best for Quick Approvals.
- TD Bank: Best for Healthcare Professionals.
Is it hard to get a small-business loan? It can be challenging to qualify for a small-business loan without a strong personal score (starting around 700) and a solid cash flow from your business. Those are among common reasons why your business loan application can be denied.How can a woman start a business? ›
- Remember It Takes Time.
- Connect With Other Female Entrepreneurs.
- Have Confidence in Yourself and Your Business.
- Be the Face of Your Company.
- Don't Let Impostor Syndrome Hold You Back.
- Get Access to Capital.
- Join an Entrepreneur Network.
- Start Before You're Ready.
Ineligible businesses include those engaged in illegal activities, loan packaging, speculation, multi-sales distribution, gambling, investment or lending, or where the owner is on parole.Can I get an SBA loan with no money? ›
The SBA Microloan is one of the few SBA loan programs backed by the Small Business Administration (SBA) that doesn't have a down payment requirement. However, the SBA will still require loan applicants to submit a personal guarantee.What loans can I get to start my own business? ›
- Online term loans. Term loans are generally issued by online and traditional lenders, and involve a bank extending a lump sum of cash, repaid over a set period of time, at a set interest rate. ...
- Business lines of credit. ...
- SBA 7(a) loans. ...
- SBA Microloans. ...
- Asset-based financing.
You'll want to have a great personal credit score, strong business financials (or at least an impressive business plan,) as well as ample collateral to qualify for a first-time business loan from a bank. If you have a few years in business and solid annual revenue, you'll be even more likely to qualify.Can I get a business loan with a 500 credit score? ›
When you have bad credit, you can still get a small business loan. This is because your credit score doesn't matter as much as the overall financial health of your business. Many lenders require a minimum credit score of 500, at least six months in business, and more than $30,000 in annual revenue.How do I get money to start a business without a loan? ›
- Savings. As an entrepreneur, you should have a long-term commitment to your business and be ready to take risks. ...
- Entering Contests. ...
- Crowdfunding. ...
- Product Presale. ...
- Family and Friends Lending. ...
- Private Investors. ...
- Angel Investors. ...
- Venture Capitalists.
Startup loans typically range from $9,000 to $20,000. You can be funded for as little as $500 or for as much as $750,000 (though you'll need a large personal income for a loan that size). Startup loan decisions are made differently from other forms of business financing.Which loan is best for small business? ›
- Best Overall: Kabbage.
- Best Revolving Line of Credit: Fundbox.
- Best for Microloans: Kiva.
- Best for SBA Loans: Fundera.
- Best for Same-Day Funding: OnDeck.
- Best Lender Comparison Site: Lendio.
- Marketing copywriting.
- Content creation.
- Public relations consulting.
- Brand ambassador.
- SEO consulting and strategy.
- Social media management.
- Event planning.
- Vet Your Business Idea. ...
- Tap Into Free Resources. ...
- Network With Communities of Support. ...
- Live on Personal Savings. ...
- Look for Alternate Funding Options.
- E-tailing. Electronic retailing or e-tailing is a great way to sell products online. ...
- Tiffin services. ...
- Daycare centre. ...
- Salon services at home. ...
- App development or freelance coding. ...
- Baked goods. ...
- Remote assistant. ...
- Boutique and tailoring.
The SBA does not state specific credit score minimum requirements, but business mentors recommend entrepreneurs have a credit score in the mid to high 600s. Some loan products, like the SBA microloan program, may have SBA loan credit requirements on the lower end.How much down payment do you need for an SBA loan? ›
Do SBA loans require a downpayment? Yes, the minimum SBA loan down payment requirement is 10% on 7(a) and 504 loans and is based on a business's cash flow and collateral. Weak cash flow or low-value collateral can increase the down payment requirement to up to 30% of the loan amount.Does your credit score affect SBA loan? ›
VA's residual income guidelines ensureVeteran borrowers can afford the loan and determine how much money a Veteran must have left over after all debts and living expenses are considered. There is no minimum credit score requirement. Instead, VA requires a lender to review the entire loan profile.Does everyone get approved for SBA? ›
In general, eligibility is based on what a business does to receive its income, the character of its ownership, and where the business operates. Normally, businesses must meet SBA size standards, be able to repay, and have a sound business purpose. Even those with bad credit may qualify for startup funding.What happens if you dont pay back a SBA loan? ›
Default on the SBA Loan
First, the lender will seek payment from the business for the outstanding balance of the loan. However, if the business cannot pay the full amount, the lender will foreclose on the collateral pledged by the business. Your business assets may not have much value.
If you're starting a business with a lower credit score, there are several loan routes you can take. Experts consider the startup loans backed by the Small Business Administration (SBA) to be the gold standard in startup loans. These include SBA 7(a) loans, 504 loans, and microloans.Do banks give loans to startups? ›
So yes, banks do make loans to startups – provided they demonstrate the ability to repay them. Generally, that means: Strong collateral. Lenders expect borrowers to put up something – usually their home or other significant asset.Is it easier to get a loan with an LLC? ›
LLCs follow the same loan application process as other types of businesses. The major difference is who holds liability for the loan funds in case the borrower defaults. With an LLC, the company owners are not personally responsible for the loan funds unless they sign a personal guarantee.Can I get a business loan with my EIN number? ›
Can I Get a Loan with Just My Business EIN? Yes, there are certain circumstances where a lender will not use your personal credit score, but only your EIN as a factor in lending to you. Note that they won't just use your EIN in isolation, as there are many factors that go into qualifying for a small business loan.Can someone with bad personal credit get a business loan? ›
While it may be difficult to get an unsecured business loan for people with bad credit, it is possible with higher interest rate. Most banks reject your bad credit business loan application as they do not see your creditworthiness beyond credit score and credit report.Can I buy a business with no income? ›
The most popular methods to buy a business with no money of your own are SBA loan and Seller financing. There are more ways such as getting an equipment loan, depending on the type of business you are buying. No Debug Key available as Do Not Track is enabled.Which bank gives cheapest business loan? ›
Currently, HDFC Bank offers the lowest business loan interest rate of 11.90% to business units with high turnover above ₹ 50 Lakh.Which bank will give business loan? ›
|Lender||Interest Rate||Loan Tenure|
|HDFC Bank||11.90% p.a. to 21.35% p.a. (Rack interest rate)||12 months to 48 months|
|IIFL||11.75% p.a. to 32% p.a.||12 months to 60 months|
|Fullerton India||17% p.a. to 21% p.a. (floating)||12 months to 48 months|
|DHFL||17% p.a. onwards||Up to 5 years|
With those disadvantages out of the way, are business loans worth it? Yes, but only if you have a good reason for taking one on. You must know why you need the funds and the likely outcome of getting hold of those funds. To begin with, the return should be high enough for you to repay the loan with ease.What can I sell as a lady to make money? ›
- Sell old clothes. If you have some clothing that's in decent condition, but you no longer wear it, try selling it. ...
- Make jewelry. ...
- Repurpose old phones. ...
- Make decorative coffee mugs. ...
- Make t-shirts. ...
- Sell furniture. ...
- Create planners or PDFs. ...
- Get paid to write.
- Identifying the most profitable small businesses.
- #1. Business Consulting.
- #2. Real Estate Agents.
- #3. Cleaning Services.
- #4. Social Media Management.
- #5. Creating Online Courses.
- #6. Start a Small Business that Makes Candles or Soap.
- #7. Payroll Services.
- Freelancing for Professionals. Freelancing is one of the options to earn money instantly, as the freelancer receives the money just after the project completion. ...
- Food & Beverage Business. ...
- Blogging. ...
- Boutique. ...
- Digital Marketing. ...
- Custom Jewellery.
Answer and Explanation: The easiest form of business organization to start and stop is the sole proprietorship. A sole proprietorship describes personal entrepreneurship or business that is owned and managed by a single individual.Whats the cheapest and easiest business to start? ›
- Content creation. ...
- Personal or virtual assistant. ...
- Event planning services. ...
- Errand/concierge service. ...
- Professional reviewer. ...
- Social media consultant. ...
- Etsy shop. ...
- Online courses and tutoring.
- Tiffin Services/Food Business. ...
- Pet Grooming/Training. ...
- Yoga Instructor. ...
- Clothes Business. ...
- Beauty Parlour. ...
- Organic Cosmetics/Toiletries. ...
- Consultancy Business. ...
- Data Entry Business.
Generally, the minimum credit score for SBA and term loans is around 680. If you're on the lower end of this spectrum, you'll likely need very strong business credentials to qualify, such as several years in business or significant annual revenue.What are the chances of getting approved for an SBA loan? ›
At large banks, the approval rate for business loans, including SBA loans, is only around 25%. At small banks, the approval rate is higher—sitting around 49%—but more than half of borrowers still get turned away. So if you have been denied for an SBA loan, you're certainly not alone.How fast are SBA loans approved? ›
The SBA promises a turnaround time of 36 hours for their express loans. But, that doesn't include the time it takes for the lender to approve the loan, which could tack on another few weeks. So, instead of 60-90 days, you're looking at 30-60 days for the SBA loan processing time when all is said and done.What credit score does SBA use? ›
Instead of a personal credit score, the SBA uses the FICO Small Business Scoring Service (SBSS) when evaluating 7(a) loan applicants. The system calculates the business owner's credit bureau data, financials and other factors to produce a number between 0 and 300.Does everyone get approved for SBA loan? ›
In general, eligibility is based on what a business does to receive its income, the character of its ownership, and where the business operates. Normally, businesses must meet SBA size standards, be able to repay, and have a sound business purpose. Even those with bad credit may qualify for startup funding.
You have a low overall personal or business credit score, or a poor credit history. You do not have sufficient collateral or assets to secure your loan. You do not have enough free capital or cash flow to meet loan repayments. You have too much already outstanding debt.Can self employed get SBA loan? ›
If you're self-employed and need financial assistance, you may be able to qualify for a U.S. Small Business Administration (SBA) loan. These loans can provide much-needed funds at competitive interest rates, but you'll need to meet eligibility requirements set forth by the SBA and its network of individual lenders.What do I need for a SBA loan? ›
- Personal Background Statement. ...
- Professional Resume. ...
- Personal Credit Report & Score. ...
- Business Credit Report. ...
- Personal Tax Returns. ...
- Legal Documents. ...
- Business Plan. ...
- Use of Loan.
While the SBA does not designate a credit score minimum, it typically looks for people with good personal credit. These credit requirements are most applicable for the SBA 7(a) and 504 loan programs, whereas SBA microloans and Community Advantage loans cater toward startup businesses with lower credit scores.What happens after SBA loan is approved? ›
After approval, the lender will disburse the funds in days or a few weeks. The funds can be used for various purposes, including working capital, purchase of equipment or inventory, and business expansion. Some SBA loans, though, restrict how you can use the funds.How does a SBA loan work? ›
How do SBA loans work? You apply for an SBA loan through a lending institution like a bank or credit union. That lender then applies to the SBA for a loan guarantee, which means if you default on an SBA loan, the government pays the lender the guaranteed amount.How long after my loan is approved do I receive the money? ›
As with banks, it usually takes one to seven days to receive funds after approval. Approval itself is typically offered on the same day you apply, as long as you fit all of the requirements.How do you qualify for microloan? ›
- For-profit small business. To qualify for an SBA Microloan, you should have a for-profit small business. ...
- Average credit. Most microlenders don't require excellent credit. ...
- Ability to repay the loan. ...
- Collateral and personal guarantee. ...
- Good character.
SBA loans and SBA express loans can be used for a wide range of expenses. According to the SBA, you can use these loans for “most” business purposes, including start-up, expansion, equipment purchases, working capital, inventory or real-estate purchases.