Small Business Loans for Women Entrepreneurs
Last updated Dec. 18, 2024
Congratulations on the great accomplishment of owning a business or planning to start one. Current economic climate and lending conditions certainly haven’t made it easy on you. (Of the total SBA 7(a) and 504 loan approvals in FY 2024, for example, only 30.4% were for women-owned businesses.
In spite of that tough reality, a 2024 study commissioned by Wells Fargo found, women-owned businesses made up nearly 40% of all U.S. businesses, and the growth of women-owned businesses outpaced male-owned businesses during the COVID pandemic. According to that same study, the hard work of women entrepreneurs across this country contributes to employment of more than 12 million people and generates $2.7 trillion in revenue.
But that’s still just a small slice of the total pie available. With the right resources in place, the study found that women-owned businesses stand to contribute $7.9 trillion in revenue to the U.S. economy.
Well then, let’s go girls.
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The Best Business Loans for Women
You have a number of options at your disposal when searching for a business loan for women. The best option for you and your business depends on how much you’re looking to borrow, how quickly you need the funds, and your qualifications—namely your personal credit score, your average annual revenue, and the amount of time you’ve been in business.
Here are your top loan options, plus some alternative financing options below.
SBA Loans
Best small business loan for women entrepreneurs with strong credit and business financials, and who have tried but failed to secure financing elsewhere.
Summary: Although they aren’t exclusively for women (very few loan products are, for legal reasons), SBA loans have some of the most competitive payment terms and interest rates on the market—plus, SBA loans can be used for nearly any business purpose.
As a government entity, the U.S. Small Business Administration guarantees loans for small businesses; however, the SBA itself does not issue these loans. Instead, banks and other direct lenders issue the loans, and the SBA subsidizes a portion of the loan if the borrower defaults.
Because of this government-backed security, lenders are more likely to work with small businesses. Therefore, SBA loans for women are great financing options for those who can qualify—you’ll get low interest rates and long-term financing (seven-year terms or longer).
Plus, the SBA offers multiple programs within its suite of business loans.
- The SBA microloan program lends small amounts of money, up to $50,000, for startups and micro-businesses.
- The SBA 7(a) loan program offers general-purpose working capital for businesses that are already a few years old.
- SBA Express loans are part of the 7(a) program but have slightly more flexible qualifications, and they fund faster than other SBA loans.
- The SBA 504 loan program provides money specifically for the purchase of commercial real estate or equipment.
How to qualify: To qualify for one of these loans, you’ll need to find an SBA lender—often a bank or credit union, though some online lenders also issue SBA loans—and meet a range of requirements. Along with a good personal credit score, a decent annual revenue, and often at least a couple of years in business, you’ll need to demonstrate that you’ve personally invested in some way in your business and that you’ve tried other avenues to secure financing before turning to the SBA. Along these lines, the process to apply for an SBA loan involves significant paperwork and a longer time to get approved and funded than other sources of financing.
Bank Loans
Best small business loans for women business owners who have good to excellent credit; even better if you have an existing relationship with a bank.
Summary: Banks have traditionally been the place for small business owners to go for a loan, and with good reason. Particularly if you already have an account with a bank—and therefore an established relationship and financial history—then taking a business loan out from a bank can often yield you highly competitive interest rates and long terms. You’ll generally find both term loans and business lines of credit through banks.
While banks typically have strict qualification requirements, many of them offer resources and loan products specifically designed to support and encourage women, veteran, and minority business owners.
How to qualify: Most banks require you to have excellent or good personal credit (that is, a minimum FICO score of at least 680), a minimum annual revenue of at least $100,000, and typically at least two years of business history. Whether or not collateral is required to secure your loan will depend on the bank and the specific loan product; many banks offer both secured and unsecured products. Generally, you can expect to apply over the phone or in person for a bank loan.
Online Loans
Best small business loans for women who don’t qualify for a bank or SBA loan and/or who need faster funding than those loans typically offer.
Summary: Online lenders offer almost every type of business financing: short-term and long-term business loans, business lines of credit, invoice financing, equipment financing, and more.
Online business loans can be an especially good option for women business owners just starting their business or for those with personal credit scores that edge them out of qualifying for bank or SBA loans. Online lenders typically have lower credit score, time in business, and annual revenue minimums than banks and SBA lenders require, and the application process is often faster and may involve fewer documents than other loan applications.
These loans, however, do carry a couple of key drawbacks: higher interest rates and shorter terms than loans from more traditional lenders.
How to qualify: For online term loans and lines of credit, you can often qualify with a minimum personal credit score of 600 or higher, at least six months in business, and annual revenue of at least $50,000. Like bank loans, collateral requirements vary by lender and loan type. But if you opt for equipment financing or invoice financing, then the equipment you purchase or the accounts receivables that you finance serve as the collateral.
Microloans
Best small business loans for women entrepreneurs with smaller funding needs and who don’t currently meet qualification requirements on other types of loans.
Summary: Microloans range from several hundred dollars to a typical maximum of $50,000 and can be used for a range of business needs. These small business loans tend to come from nonprofits and other organizations that target underserved communities with their lending efforts.
Because these loans come in smaller amounts, they’re also likely to come with shorter terms than you’ll find with a larger bank or SBA loan. You should, however, be able to find fairly low-interest microloans, and you may even find some that are interest-free, particularly if they follow a crowdfunding model (more on that below).
How to qualify: You’ll likely find microlender qualification requirements to be more accessible than those of other lenders, though it will still be important—and necessary—to provide general business information, such as your annual revenue and time in business, along with financial information, including current and past debts and bankruptcies.
Alternative Financing Options for Women Business Owners
Although a small business loan may be the most accessible way for women-owned businesses to get funding, it’s not the only way. Here are several alternative options you may consider:
Business credit cards: You don’t need to meet any time in business or annual revenue minimums to get yourself a business credit card. All you need is a solid credit score and the financial fortitude to pay that credit card bill in full every month. If you can do that, then a business credit card can make excellent sense for your financing needs—and can help you build your business credit score while you’re at it.
Crowdfunding: It’s pretty much as its name suggests. You’ve likely already heard of crowdfunding sites like IndieGoGo and Kickstarter, but there are many others out there. As mentioned earlier, some microlenders operate within this model. This financing option requires a lot of output on your part—to create your campaign and drum up investor interest—and often for modest returns. On the plus side, though, it’s not a bad way to market your business and build your customer base.
Small business grants for women: With a business grant, you won’t have to pay back the cash you receive as you would a loan. However, most grants are fairly restrictive on what you can use the funds for. Application processes for grants can be extensive and exhaustive, and competition for them is high. But if you’re motivated by the idea of “free money,” it’s well worth a shot to apply for a small business grant.
VC firms and angel investors for female entrepreneurs: Instead of applying for a business loan or searching for a grant, you could also look into equity financing, which involves raising money from venture capital (VC) firms and investors. In return for capital, investors get a portion of ownership (or equity) in your business. Working with an investor can be a great option if you need a large amount of capital to start or scale your business.
If you’re just beginning the journey of starting and owning a business, check out our full list of startup funding options.
Fundera Can Help
We’re here to take some of the work of finding a small business loan off your plate.
You can answer these few questions—with no impact to your credit score and free of obligation—to see which loans you qualify for. One of our trained sales associates will personally advise you through the entire loan process, from comparing options to signing your agreement.
Let’s get you funded!
How much do you need?
No cost to you
Your credit score won't be impacted
Compare multiple lenders with one application