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.

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)
• Cleantech

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.

Amber Grant

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.

FAQs

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.