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Starting Your Own Business? Here are the Best Business Loans for Women in 2024

Last updated 03/15/2024 by

Businesses in U.S are owned by women. (Source)
Even in today’s age of endless opportunity, it seems that women-owned businesses remain behind the curve. Despite accounting for more than half of our country’s population, the percentage of female-owned businesses remains at just under 29%. More than 89% of these companies are sole proprietorships. Nevertheless, women-owned businesses generate a whopping $1.4 trillion in revenue each year.
In spite of their success, many of these businesses still face challenges accessing capital. While women own nearly 30% of all small businesses in this country, they receive just 16% of all conventional small business loans each year. Fortunately, getting small business loans is not as difficult as it once was. If you are searching for a business loan for a woman-owned business, there are some fantastic options available. While most of the options available to women are the same for all business owners, women are not limited to Small Business Administration loans, bank loans, or small business grants. Several other financing options are available.

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Small business loans for women

Still, if you run a woman-owned business, the reality is you might not find as many lending opportunities as businesses owned by men. Not only are women receiving fewer loans, but the loans that are approved are often for less money. In fact, business loans for women account for only 4.4% of all the money loaned through conventional lenders each year.
The good news is that several special programs and some alternative lenders are addressing these lending inequities. Whether you have good or bad credit, if you’re looking for startup funding or capital for an established business, there may be an ideal solution available for you and your company.
The availability of funding will depend on such factors as your time in business, type of business, and personal credit score. When you know your options, look at the total cost of borrowing money. Ask lenders if they charge loan origination fees or penalize for early prepayment of the loans. Raising capital should be affordable, but it should also make good business sense.

Small business loans for women with bad credit

Not everyone who aspires to run a business or even expand an existing company has excellent credit. Even if your personal credit has suffered, you may still find opportunities. Avenues to pursue include:
  • Small business loans
    There aren’t many small business lenders who deal with poor credit borrowers, but there are a few. Among them are OnDeck and Kabbage.OnDeck is a good choice if your credit score is 500 or above. Loans are offered from $5,000 to $500,000 with annual percentage rates starting at 9%. Try Kabbage if your credit score is below 500. Just know that APRs start at 32%.
  • Invoice financing
    If you have at least six months of activity in an online accounting software program like QuickBooks, you might qualify for a short-term invoice financing loan with Fundbox. This company doesn’t look at your credit score but instead advances 100% of your 60-90 day outstanding invoices in exchange for a fee that starts at 13%.
    • Small business grants
      While they might be hard to come by, small business grants are a fantastic way to fund your woman-owned business because you don’t have to pay them back. Many grants have strict requirements, so be sure that your business fits the criteria before you apply. Also, grant applications can be complicated, and it’s often beneficial to enlist help when making these applications.

Small business loans for startups led by women

If your business is brand-new, or still in the idea phase, it might be a challenge to obtain financing when you can’t demonstrate any measure of success. But there are some good options.
  • SBA loans
    The Small Business Administration (SBA) offers microloans of up to $50,000 for startups and some nonprofit childcare centers. The SBA’s main 7(a) loan program also has larger startup loans that have more strict qualification criteria. The good news is that the SBA has a better overall funding rate with women-owned businesses than private bank non-SBA loans. Remember the SBA doesn’t actually fund these loans. Instead, it works through other lenders and guarantees a portion of each loan. This allows lenders to provide eligible lenders with better terms and rates. SmartBiz is a leading SBA lender that let’s you know whether you prequalify for an SBA loan by filling a 5-minute application form.
  • Nonprofit lenders
    Working with a nonprofit lender that is interested in helping a woman-owned business has several advantages. These microlenders have a mission that goes beyond making money and will also sometimes help entrepreneurs in other ways. Loans of $50,000 or less are available to help small startups get off the ground, and some larger loans might be made for established businesses. Grameen America is one example of a microlender that loans over $100 million each year to female entrepreneurs.
  • Crowdfunding
    Websites such as Kickstarter and Indiegogo have become popular tools for companies to raise startup and growth capital. A campaign is simple to set up, and interested parties can “donate” to your company in exchange for gifts, which might be future products or services.
  • Personal loans
    Some small business owners finance their startups through personal loans, usually through the growing market of online lenders. Remember you will be personally responsible for paying a personal loan even if your company goes out of business. Click here to compare the rates and terms of top online lenders.

Small business loans for women with established businesses

If you have an established business and are shopping for a loan to fund growth or free up capital, you have additional options. Many lenders will still check both your business and personal credit when requesting a loan, but an established business can also use alternative financing options. Choices include:
  • Small business loans
    Several lenders offer small business loans, depending on how long you’ve been in business and your annual revenue. Leading providers of small business loans include LendingClub, the largest online loan marketplace, and Balboa Capital. Another company worth trying is Biz2Credit, which allows businesses’ to apply with 100+ lender by filling just one application form.
  • SBA loans
    SBA loans are available for established businesses and, in fact, might be easier to qualify for since you can show that your business is viable with financial statements. SmartBiz has excellent SBA loan rates and will match you with the best lender for your needs and credit situation.
  • Alternative financing
    An established business often has several alternative financing options. For example, Funding Circle can set you up with a wide range of financing options based on your business’ needs. .

Financial resources for women entrepreneurs

There are several national resources available for women entrepreneurs that can help business owners find funding, network, and learn how to successfully run a small business. These programs include:
  • SBA Women’s Business Centers
    Women’s Business Centers represent a network of nearly 100 educational centers that help women start and grow their businesses, offering seminars and helpful advice on raising business capital.
  • Women-Owned Small Business (WOSB) Federal Contracting Program
    The SBA’s WOSB Federal Contracting program was started in 2011 to level the playing field where contracts are awarded to private businesses from the federal government. By registering as a WOSB, women-owned businesses are given the opportunity to compete for federal contracts and receive assistance from the SBA.
  • National Association of Women Business Owners
    This national organization has more than 5,000 members in its 60 chapters across the country. They offer various forms of training as well as access to certifications and some types of business capital.
  • National Women’s Business Council
    The NWBC is an independent federal advisory council that serves as an information source to the President, Congress, and the SBA. The Council conducts research, publishes studies, and advocates for women-owned businesses on a national level.
  • WomanOwned
    WomanOwned is a worldwide network of more than 3.5 million women-owned businesses. The organization offers information and assistance to female entrepreneurs and serves as a vast networking source. WomanOwned also maintains an extensive database of information on loans, grants, and other business funding sources.

FAQ on Best Business Loans for Women

Can you get a small business loan with bad credit?

As a small-business owner, you need access to capital to fund your business. One way to access capital is through a small-business loan. For business owners with bad credit, getting a traditional bank loan can be very difficult. However, alternative lenders offer multiple funding options for those with bad credit.

How does an SBA loan work?

The SBA does not make direct loans to small businesses. The SBA guarantees that these loans will be repaid, thus eliminating some of the risk to the lending partners. So when a business applies for an SBA loan, it is actually applying for a commercial loan, structured according to SBA requirements with an SBA guaranty.

How long does it take to get approved for an SBA loan?

On average, the loans take around 30–45 days from application to funding. Approval time can, however, take anywhere from 1–6 months.

What is the type of business loans offered for women with bad credit?

There are some good options for women entrepreneurs with bad credit.
  1. SBA loans
  2. Nonprofit lenders
  3. Crowdfunding
  4. Personal loans

What are the financial resources for women entrepreneurs?

There are several national resources available for women entrepreneurs that can help business owners find funding, network, and learn how to successfully run a small business. These programs include:
  1. SBA Women’s Business Centers
  2. Women-Owned Small Business (WOSB) Federal Contracting Program
  3. National Association of Women Business Owners
  4. National Women’s Business Council
Visit our small business loans review page to learn more about small business loans for women and to compare your options.

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