Best Small Business Loans for Women

What are small business loans for women?

Small business loans for women are funding options that enable women to finance all aspects of their business, including getting it off the ground, growing their team, and expanding their market reach.

Best small business loan options for women

SBA (7a): best for loans backed by the government

SBA 7(a) loan

✔ Funding: Borrow up to $5,000,000
✔ Minimum Credit Score: 650
✔ Best For: SBA loans
✔ Funding turnaround: Varies.

The SBA 7(a) program features lenders such as Wells Fargo in their network and provides capped interest rates and long repayment term flexibility. Term loans and lines of credit access available. Typically, collateral will be required with a personal guarantee. Funding times vary and may be longer than most other lenders.

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FundBox: best for business loans for women with average or below average credit

Fundbox

✔ Funding: Borrow $2,500 - $150,000
✔ Minimum Credit Score: 600
✔ Loan term: 12-24 months
✔ Funding turnaround: as fast as next business day

Fundbox requires minimal documentation and access to a revolving line of credit without origination or maintenance fees. Borrowers are not required to have collateral (with exception of larger credit lines which are subject to a personal guarantee).

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OnDeck: best for business loans for women with average or below average credit

OnDeck

✔ Funding: Borrow $5,000 - $250,000
✔ Minimum Credit Score: 600
✔ Loan term: up to 36 months
✔ Funding turnaround: as soon as same business day

OnDeck offers fast business loan options such as term loans, business lines of credit, and SBA PPP loans and funding as fast as 24 hours. Minimum requirements include: at least 1 year in business, 600 credit score, $100,000 in gross annual revenue and a business checking account.

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Funding Circle: best for women owned business in business for minimum of 2 years

Funding Circle

✔ Funding: Borrow $25,000 to $200,000
✔ Minimum Credit Score: 700
✔ Loan term: 6-12 months
✔ Funding turnaround: 24-48 hours

Funding Circle offers affordable business loans with interest rates lower than alternative lenders with monthly repayment schedules for borrowers with good to excellent credit scores.

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How do small business loans for women work?

How small business loans for women work depends on the type of financing you choose. Most options will provide you with a lump sum that you are then required to pay back in monthly installments with added interest, whereas other options will give you a credit line which you can use and pay back as you go, only paying interest on the amount you have used.

Types of small business loans for women

Let’s look at the different types of small business loans for women so that you can gain a better understanding of which will work best for you and your business.

SBA Loans

SBA loans are a type of financial aid that is given out by lending partners and backed by the Small Business Administration. This means that the government acts as a guarantee to your loan, meaning there is less risk to the lender.

Due to this government guarantee, and low interest rates, SBA loans are highly sought after by small business owners and so there is a lot of competition among potential borrowers.

There are a few different SBA loans that women entrepreneurs can choose from:

• 7(a) program - The 7(a) program is the most popular among many small business owners as borrowing amounts reach $5 million with repayments of five to ten years, or up to 25 years if you have used the funds to purchase real estate.
• Community Advantage loan – available for startups within underserved communities
• 8(a) Business Development program – available for small, disadvantaged businesses
• Microloans - If you are looking for a smaller amount of financing, you should think about a microloan. This type of small business loan for women can allow you to borrow amounts up to $50,000 and is often easier to qualify for than other options.

As SBA loans are more desirable, they come with more strict qualification requirements, including a credit score of 620+, a good business history, and at least 1-2 years in business. This will, however, depend on the exact program you are looking to apply for as development programs and loans can be more generous.

Business Term Loans

Business loans are offered by a huge number of alternative lenders online. This is a good option if you are looking to receive financing more quickly as many of these lenders will offer approval and funding all within one week.

You will find that you will be able to qualify for this type of small business loan for women even if you have a bad credit score, although you should be aware that interest rates are likely to be higher.

Business Line of Credit

A business line of credit provides you with more flexibility than other financing options. This loan type allows you to borrow up to a certain limit and draw funds as and when you need them, only paying interest on the amount you actually use.

As long as you keep to your credit limit, you can usually repay the funds used over and over again until the business line of credit is closed. This is a good option for smaller expenses and gaps in cash flow.

Bank Loans

A traditional bank loan is likely to be less expensive than other options available but, like SBA loans, they can be particularly difficult to qualify for. If you can qualify for a bank loan and make your repayments on time and in full, it could help you to build up your business credit rating so that you will be in a better position to apply for financing in the future.

Business Credit Card

A business credit card works much in the same way as a business line of credit and can be a good option for covering daily, minor expenses. You may be able to get perks and offers to benefit your business, just be aware that credit cards come with particularly high APRs and so you may find it to be a very expensive financing method.

Working Capital Loan

A working capital loan is another good option if you are looking for a short-term solution to your business expenses. This includes costs such as rent, payroll, and paying off existing debt.

If your business is highly seasonal, this type of small business loan for women can help you during quieter operating periods. This usually comes in the form of a merchant cash advance or invoice financing.

How to use a small business loan for women

There are many reasons why you may choose to use a small business loan for women, including:

• buy more inventory
• expand your business office space
• hire new employees
• equipment upgrades/purchases
• new marketing initiatives

When should I get a small business loan for women?

You should only think about getting a small business loan for women if you are sure that you will be able to make repayments on time and in full. Essentially, if your business is going to achieve a higher turnover as the result of getting a loan, it is worth your while.

Are there small business grants for women?

If you cannot be sure that you will be able to afford to take on a small business loan for women, there are many small business grants offered for women to provide them with the capital they need to start and grow their business without having to pay anything back.

Some of the small business grants for women that are available include:

• The Girlboss Foundation Grant – funding of $15,000 – exclusive to women working in fashion, music, design, and the arts
• The Amber Grant Foundation – awards $10,000 every month – one grant winner is chosen to win a further $25,000 at the end of the year
• Eileen Fisher Women-Owned Business Grant – awards $100,000 split between up to 10 business owners
• Cartier Women’s Initiative Awards – from 21 finalists, 7 businesswomen will receive $100,000 and 14 will receive $30,000
• SoGal Startup Grant – awards of $5,000 or $10,000 to black women or nonbinary entrepreneurs
• Tory Burch Foundation Fellows Program – offers networking opportunities, virtual education, and a $5,000 grant
• IdeaCafe Grant – grants of $1,000 to one small business each year
• DreamBig Awards from the US Chamber of Commerce – top winner receives $25,000
• The Halstead Grant – award of $7,500 plus $1,000 for Halstead jewelry supplies – exclusive to women entrepreneurs within the jewelry industry
• FedEx Small Business Grant – awards up to $25,000
• National Association for the Self-Employed – awards $4,000 every month

Alternatives to small business loans for women

There are other small business financing options for businesswomen to consider, including:

• Venture capital and angel investors
• Crowdfunding
• A personal loan intended for business
• Friends and family

What kind of loan amount can I qualify for when applying for a small business loan for women?

The loan amount that you will be able to qualify for when applying for a small business loan for women will depend on the type of loan and the lender you choose to partner with.

You can expect to qualify for anything from $50,000 to $500,000 with the exception of the SBA 7(a) loan which offers a huge $5 million for the best qualifying candidates.

Loan amounts will also vary depending on your credentials, such as your credit score, your time in business, and your annual revenue.

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