Small Business Loans for Women
Women small business owners who need to cover capital expenses as they establish, grow, or maintain their businesses have several options for small business loans. See what small business loans for women are available and find out if any makes sense for you.
Women entrepreneurs and business owners account for more than 12.3 million companies throughout the United States alone. Collectively, women-owned businesses generate $1.7 trillion in sales, according to the latest statistics from American Express.
Although the state of women business owners from an economic perspective is strong, there are glaring statistics that show the disparity between men and women when it comes to getting funding for their small business ventures.
A recent report from CNBC highlights this trend, showing that women businesses get nearly 50% less funding than their male counterparts. Fortunately, there are financing options through small business loans designed specifically for women-owned businesses, whether for working capital, expansion, equipment purchases, or other growth opportunities.
In this guide:
- Business Loans for Women Overview
- Qualifying for Small Business Loans
- Small Business Loans for Women
- Additional Small Business Loans That Women Can Apply For
- Finding the Right Financing for Your Business
Business Loans for Women Overview
A small business loan is a fixed financing agreement where a lender provides a lump sum amount of cash in exchange for systematic payments of that amount plus interest over a set period of time. Most small business loans have fixed interest rates and predictable repayment terms that make them the gold standard in business lending.
Applying for a small business loan is not always an easy task, but the influx of online lenders has made the process less taxing. Women who want to apply for a small business loan can do so by submitting an application, either in person at a traditional bank or through an online platform.
This application requires specific information about the business, how much the loan will be, and the reason for the loan. Once reviewed, the lender then provides the loan funds directly to the business or business owner, and repayment begins shortly after that time.
Qualifying for Small Business Loans
Each small business lender offering loans to qualified applicants has different requirements that must be met in order to be eligible for funding. However, nearly all small business lenders look at the following information to determine qualification:
- Business credit score – this is a risk score based on the financial health of the business produced by a business credit reporting agency
- Personal credit score – some lenders may also look to a personal credit score if the business has not been established for an extended period of time, or if the business does not yet have a credit history
- Assets of the business – lenders may look at the assets owned by the business to determine what, if anything, may be used for collateral to back the loan
- Liabilities of the business – debts owed by the business also impact a small business loan application. These may include equipment or working capital loans, lines of credit, or business credit cards
- Time in operation – lenders may have specific requirements relating to the time a business has been in operation. In many cases, the minimum timeframe is six months, but it can be as high as two years
- Annual revenue – some business loan lenders also require companies to meet annual revenue minimums in order to qualify for a new loan
- Reason for the loan – several lenders also require small business owners to provide the reason for the financing in order to qualify
- Legal structure – business lenders may also want to review the legal structure of the business, such as an LLC, S-corp, or C-corp, to ensure it is in line with their small business lending guidelines
Whether some or all of these pieces of information are required to submit a small business loan application, lenders appreciate when companies have their ducks in a row. This means having accurate, organized financial statements at the time an application is submitted, along with past financial history that is free from significant negative marks or delinquencies.
Small Business Loans for Women
While most small business lenders focus on the broad scope of business owners in terms of their financing options, there are a few select lenders that focus on business loans for women. Here are a few of the best small business loans for women.
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KeyBank is a nationwide lender with a unique lending program geared toward women entrepreneurs. The Key4Women program supports the financial progress of new and established businesswomen through online resources and financing options underwritten by KeyBank.
For women business owners who are members of the program, term loans are available with a minimum loan amount of $10,000. The repayment terms and interest rates vary depending on the amount of the loan as well as the credit history of the business and owner.
The term loan offered through the program may provide up to 100% financing for equipment purchasing, be unsecured or secured, and may be SBA guaranteed. Term loan applications for women-owned businesses may be submitted in person or online after speaking with a KeyBank business lending specialist.
Women’s Economic Ventures
The Women’s Economic Ventures organization was established in 1995, with dedicated funds from grant donors and bank partners. Currently, the organization offers women-owned businesses both start-up and expansion loans with fixed interest rates and predictable repayment terms. Start-up loans for women-owned businesses range from $250 up to $25,000, while expansion loans can be as high as $50,000.
Applicants must provide information about the time the business has been in operation, annual revenue, reason for the loan, and the business and financial history of the woman business owner. Funding can take up to four weeks to arrive after a full application is submitted.
Additional Small Business Loans That Women Can Apply For
In addition to the specific women-owned business loan options mentioned above, there are several lenders that offer small business loans regardless of gender. A few of the leading small business loan providers are listed below.
Through the Small Business Administration, SBA loans for women can be secured through a large network of lenders backed by the SBA. The small business loan program through the SBA has set guidelines for loans made by its partner lenders, community organizations, and some micro-lending institutions. Because the SBA helps guarantee some of the loans, women-owned businesses have easier access to affordable funding when they need it.
With an SBA loan, women business owners submit an application in person or online through a partner lender. Each business must be a for-profit organization, be headquartered in the United States, have invested their own money in the business, and have exhausted other financing options from other lenders.
SBA loans may also be available for women business owners with less than perfect credit. Interest rates, repayment terms, and loan amounts vary from lender to lender and are dependent on the application details submitted.
Funding Circle is a nationwide online small business lender that offers small business loans to women business owners. Fixed-term loans from Funding Circle are available between $25,000 and $500,000 to qualified women business owners, and a decision can be made in as little as 24 hours after all application documents are submitted.
Interest rates for small business loans for women through Funding Circle start as low as 4.99%. The application process is quick and simple, and it is all completed through a secure online platform. Also, small business loans for women from Funding Circle may be used for a variety of capital expenses, including hiring new employees, moving or expanding the business, refinancing debt, or purchasing inventory or equipment.
Lendio is an online marketplace designed to take the complexities out of the small business loan process. Through its large network of small business lenders, Lendio offers small business term loans, working capital loans, and other financing options ranging from $1,000 up to $5,000,000 in funding.
The lowest possible interest rate for a fixed-term loan from Lendio partners is 6%, but the rate offered as well as repayment terms and other fees are dependent on the business applicant and the lender selected.
There is also an annual revenue requirement of at least $120,000 to qualify for a Lendio partner small business loan. Applications are submitted online, and approval may be as quick as one business day.
You can learn more in our full Lendio review.
Another option for women-owned businesses in need of financing is LendingClub, a large nationwide lender that offers both personal and business loans. For business owners, LendingClub offers fixed interest rate term loans ranging from $5,000 up to $300,000 depending on the reason for the financing. Interest rates are set for the life of the loan and range from 5.99% up to 29.99%, with an average rate of 14.65% for well-qualified business owner borrowers.
Loan terms can be as short as one year or as long as five years. Business owners requesting a small business loan from LendingClub can submit a quick application online, including detailed information about the business’s time in operation, annual revenues, and credit history. Funding can take place within a few business days.
OnDeck is another online lender providing small business term loans to qualified business owners. Through OnDeck, business owners have the option of a short- or long-term loan, each of which provides predictable repayment and a fixed interest rate. Short-term small business loans from OnDeck have a repayment term of three to 12 months, available for business owners who need to finance projects with an immediate return on investment.
Long-term loans from OnDeck have repayment terms ranging from 15 to 36 months, used for larger projects with a longer return on investment timeframe. Interest rates for OnDeck loans start as low as 9% for short-term loans or 9.99% for long-term loans. Business owners must submit an application online to qualify, providing detailed information about the business’s time in operation, annual revenue, and reason for the loan.
Accion is another option for small business owners in need of loan financing. With an Accion small business loan, business owners may qualify for financing from $300 up to $1,000,000, with a fixed repayment term and a set interest rate. Accion small business loans offer interest rates ranging from 7% to 34%, and even small business owners with less than perfect credit history may qualify.
The repayment terms and maximum loan amounts are dependent on where the business is located and the industry in which it operates. Applications can be submitted online in a few minutes, and funding may be approved in as little as two business days.
Another online lender offering access to small business financing solutions through term loans is National Funding. The company provides small business loans with fixed interest rates and set repayment terms depending on the type of industry the business operates in.
National Funding small business loans may be approved for as little as $5,000 up to $500,000 with a simple online application. The company connects each small business loan application with a lending specialist experienced in that particular industry, and the loan funds can be used to cover capital expenses like equipment, inventory, marketing, or working capital.
The company may be able to approve a small business loan application in as little as 24 hours after all documentation has been received.
Finding the Right Financing for Your Business
Are Small Business Loans the Best Choice?
Small business loans for women business owners are the go-to choice for fixed, predictable financing for capital expenses. Women business owners who qualify for small business loans may be able to secure the financing they need for a variety of business needs, including growth, cash flow, equipment purchases, or overhead expenses.
In addition to having set repayment terms, small business loans may offer a more affordable solution than other financing options, detailed below.
Women business owners also have access to several other financing options to help fund their business needs, including business lines of credit, invoice factoring, grants, and outside investors.
Business Line of Credit
Business lines of credit may offer more flexibility than small business loans to qualified applicants, as they work as a revolving credit line that can be tapped into when needed. However, small business lines of credit often have higher interest rates and less flexible repayment terms compared to small business loans.
Invoice factoring is another option for small business owners who have outstanding accounts receivable they want to use for funding. In this process, outstanding invoices are sold to a factoring company for an immediate lump sum cash payment, and then collection on the invoices is managed by the invoice factoring company. The fees associated with invoice factoring can be far higher than a term loan for women-owned businesses, and the agreements can be complex.
Women-Owned Business Grants
Women-owned businesses also have access to special grant funds and outside investors when they are in need of financing. Small business grants are beneficial because, so long as the grant program obligations are met, there is no need to repay the funds received. However, women-owned business grants are highly competitive, and not every business owner will qualify.
Financing from Investors
Finally, outside investors, including angel investors and venture capitalists, may offer financing to women-owned businesses. These investors often require something in return, such as an equity stake in the business or control over some or all of day-to-day operations. These partnerships can be invaluable to women business owners, but they require careful consideration before accepting funding.
Overall, small business loans for female entrepreneurs and business owners can be helpful in covering financial needs. Be sure to consider your options for financing before signing on the dotted line, and take the time to review costs, terms, and conditions of a small business loan before making your selection.