Best Small Business Loans for Women

Compare the best small business loans for women side-by-side

What are small business loans for women?

A small business loan for women is funding that helps women entrepreneurs kickstart, expand, or enhance their businesses. There are no distinctions between business loans for men and women in the entrepreneurial world. The Equal Credit Opportunity Act (ECOA) mandates lenders to refrain from gender-based discrimination when evaluating loan applications. Consequently, women possess equal opportunities to apply for the same loans as their male counterparts.

Loans for small businesses are available through banks, credit unions, and online lenders. Business loans offer substantial financial support with extended repayment periods as opposed to personal loans with shorter financing options. However, business loans require comprehensive documentation, such as financial records and business blueprints.

Accessible loans for female business owners include traditional bank loans and Small Business Administration (SBA) loans. Women business owners can explore government-backed SBA loans if eligibility for such conventional loans proves challenging. In the fiscal year 2022, the SBA disbursed an impressive $43 billion in funding, extending approvals to over 62,000 traditional loans for entrepreneurs, including women.

Types of small business loans for women

Whether you go through a traditional bank or an online lender, women and other small business owners can try for the following types of business financing:

• SBA Loan: Government-backed term loans for small businesses offer perks like extended repayment terms and lower interest rates.
• Term Loan: Known as traditional financing, this is one sum with a fixed repayment period.
• Line of Credit: Flexible revolving funds over a specified timeframe.
• Working Capital Loan: Lump sum paid back based on your sales.  
• Merchant Cash Advance: Not a traditional loan, but similar to a working capital loan with one amount paid back with a percentage of your daily or weekly credit card transactions.
• Invoice Factoring & Financing: When you sell your outstanding invoices to a third party at a discount in exchange for quick cash. This option means you aren’t responsible for collecting the due payments.
• Equipment Financing: Loan to purchase equipment. The amount is based on the value of the equipment, and the equipment serves as collateral.

This comprehensive chart will aid in understanding the range of small business loan options for women entrepreneurs available through our vetted lenders.

Small business loan requirements

To secure a small business loan tailored for women entrepreneurs and other business owners, several eligibility criteria must be met:

1. Annual Revenue: Lenders typically expect your business to maintain a specific income level, making startup business loans without established revenue more challenging to obtain. Some lenders on our list have specific annual revenue requirements. Accion Opportunity Fund is on the low end of revenue requirement at $50K annually, while BlueVine is on the high end at $480,000 annually.
   
2. Credit Score: Your credit score plays a crucial role in the evaluation process, reflecting your reliability in loan repayment. While most business loans generally require a credit score of around 600, specific lenders from our list have lower credit score thresholds. For instance, SBG Funding and Fora Funding have a minimum requirement of 500, while both QuickBridge and Accion Opportunity Fund state they consider all credit scores.
   
3. Time in Business: Lenders evaluate the longevity of your business, with requirements typically ranging from six months to one year. Selected lenders on our list have varying time in business requirements, such as SBG Funding, FundBox, Fora Funding, and Biz2Credit requiring a minimum of six months in business, while BlueVine, SmartBiz, and Funding Circle have a more extended requirement of two years.
   

Understanding and meeting these criteria can significantly enhance your chances of securing a small business loan tailored to women entrepreneurs.

How do women get a small business loan?

Qualifying for a small business loan as a woman is the same process as for a man. To get any type of loan, it starts with a conversation, says Shalita Hale, Vice President of Commercial Lending, Exos Small Business Lending. “You can talk with someone at your local bank, at an SBA Small Business Development Center at a local college, engage with a business loan broker, or a direct lender such as myself,” Hale says. 

Talking to an expert like Hale can help you determine your financing options and how they align with your business needs. Some things to consider are your overall financial health and how urgent your financing needs are.

Once you’ve identified lenders that can meet your needs, the following four steps are involved in the application process.

1. Fill out the application. “Just about every lender has an online component nowadays,” Hale says. Loan applications can be a lengthy process or take a matter of minutes. Some of it depends on the lender, and some on how prepared you are. SmartBiz, for example, uses an AI application process to reduce time, while FundBox boasts a three-minute application.
   
2. Gather the proper documentation. Preparing the necessary information and documentation in advance expedites the application process. “Documents that I collect after the initial conversation are three years of tax returns, a personal financial statement, and a resume,” Hale says.
   
   In our research, we found that most financial institutions will request all or some of the following:
   
   ☑️ Business name, address, and tax ID
   ☑️ Collateral details
   ☑️ Credit score
   ☑️ Personal information for each partner/owner (name, address, and social security number)
   ☑️ Profit and loss statements
   ☑️ Tax returns
   ☑️ Three months of recent business and personal bank statements
   ☑️ Time in business
   
   “The most prepared and ultimately most successful applicants already have well thought out projections, assumptions, and a business plan,” Hale points out. “However, I have plenty of resources and can offer information, provide templates, and connect clients with other professionals who can assist with planning.”
   
3. Wait for approval. The approval process time can vary. Many online lenders like to promise quick turnaround times. Although this is an attractive proposition, Hale notes, “The internet can be used to encourage transparency to help facilitate meaningful relationships and quicker results, or it can be used as a smoke screen so that you never really know who you are working with or how long the process will take.”
   
4. Close on your loan. You and your lender will formalize your loan agreement and sign all the necessary documentation upon approval. This is the final step in obtaining your funding, and it can again be fast or drawn out. Some online lenders like BlueVine promise same-day funding or SBG Funding within 24 hours.

“The most prepared and ultimately most successful applicants already have well thought out projections, assumptions, and a business plan.”

How hard is it for a woman to get a business loan?

While the ECOA mandates that lenders don’t discriminate against either gender when granting loans, other factors at play might make it harder for a woman to get a business loan than a man.

“To be clear, it’s not easy for anyone to get a business loan,” Hale says. “You need money, sophisticated financial projections, assumptions, a solid business plan, and a track record of success. Oftentimes, to ensure success, an accountant, a mergers and acquisitions specialist, a corporate attorney, or other financial professional is engaged to assist with planning and creating these documents. When you consider that only 25% of these financial professionals are women, you can begin to understand why fewer women obtain business loans. Men are three times more likely to have a buddy who they can call for advice on these essential aspects of business planning.” 

As a female commercial lender, Hale connects women entrepreneurs to resources such as these to ensure their success and level out the playing field. Becoming a member of the National Association of Women Business Owners (NAWBO) has been instrumental in this effort.

Another factor Hale points out is support. “During the time of our lives when male entrepreneurs are starting businesses, women are supporting their families and usually have the primary responsibility of child-rearing,” she says. “Starting a business is a grind. Putting together a business plan requires having quiet time to focus, research, get out and network, and collaborate with other professionals. Quite frankly, women don’t usually have the support at home needed to focus on successfully growing a business. We are more likely to lend that support to others.”

She finds that roughly 90 percent of male applicants that she sees have a woman supporting their efforts behind the scenes. On the flip side, women entrepreneurs that Hale helps also have supportive spouses at home.

Alternative small business financing options for women

There are many funding options tailored to the specific needs and circumstances of female entrepreneurs that offer flexibility and opportunities to propel your enterprise forward. By exploring alternatives to traditional business loans, you’re taking a strategic approach that will benefit you in the long run. 

According to Hale, some alternative funding options include:

• Small business grants for women in business
• Crowdfunding
• Angel investors for startups
• Private equity investors for existing businesses
• Gifted funds
• 401K savings with a rollover for business startups (ROBS)
• Seller financing – when purchasing an existing business
• Home equity loans
• Borrow from a whole life insurance policy with a cash value

“When in doubt, ask around,” Hale says. Organizations such as NAWBO are tremendous resources in helping women entrepreneurs identify and find funding for their business needs.

If a lender loan best suits your situation, Nav and Big Think Capital are two marketplace resources for small business alternative lenders. Both have large third-party lending networks. They can help connect you to business lenders that align with your business.

Small business loans for women FAQ

Can women get business loans with bad credit?

As a woman, you can get a small business loan with a poor credit history. Check with vendors such as SBG Funding, For a Funding, Accion Opportunity Fund, and Biz2Credit, who have lower credit score requirements than others.

Hale warns, though, that the worst loan products don’t have any credit standards. “As an SBA 7 lender, I am not simply looking at the credit score to determine creditworthiness. We look at the whole person and the project to find what makes sense and what we believe is reasonable to expect the applicant to repay,” she says.

How do I qualify for a small business loan for women?

There’s only so much you can do to get approved for a business loan because, ultimately, the lending decision lies with the lender. Proactive steps to positively influence this decision include aligning your financial circumstances with the lending criteria of the chosen lenders, meticulously filling out their applications, and promptly providing all requested documentation.

“Lending is about relationships,” Hale says. “I would encourage anyone who is looking for a business loan online to seek to know the person who will qualify and structure your loan package to ensure that they have your best interests at heart. A lot goes into preparing a loan application for submission, and results can vary greatly depending on how invested your lending representative is in your transaction. LinkedIn is a helpful tool for this purpose, as is a good old-fashioned telephone call.” 

Are there business loans specifically for women?

The short answer is no; there are no loans designated specifically for women, but according to Hale, some are easier to get than others. These include:

• Loans to purchase an existing business instead of starting a new business from scratch.
• SBA 7a loans – while not easy to get, have more flexible qualifying criteria.

On the flip side, Hale cautions that if a loan is too easy to get, there’s a reason. “Some business loans can be funded in as little as 24 hours. However, they are typically very risky and often have weekly payments deducted from the business’ topline revenue regardless of other business obligations. The interest and fees for these loans end up costing upwards of 50%,” she says. To avoid this trap, take the time to plan and get affordable capital from reputable lenders.  

Methodology: How we choose the best small business loans for women

We researched women in small business, women-owned businesses, and funding for women-owned businesses to compile a list of 36 online lenders that we narrowed down to ten to help you find a lender you can trust. 

We set strict criteria, including:

• A minimum loan offering of $150,000
• Swift funding within a week of approval
• No requirement for time in business over two years
• Acceptance of all credit scores, including those at 660 or lower

In our final evaluation, we developed and employed a thorough scoring system ranking each lender on a scale from 1 (unsatisfactory) to 3 (outstanding) on four sections, each weighing 25%:

• Eligibility requirements
• Lender details
• Rate and fee transparency
• Overall brand reputation

The total sum of our assessments revealed vital insights that help women in business make informed decisions on small business funding and reputable online lenders.

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Disclaimers

All loan offers and qualifications require credit approval and are subject to change with or without notice.

Loans are made by FC Marketplace, LLC dba Funding Circle and arranged pursuant to Nevada Installment Loan Company License No. IL11154 and IL11155, California Financing License No. 6054785, North Dakota Money Broker License MB 102840, South Dakota Money Lending License MYL.3054, Vermont Commercial Lender License No. 1287979 CLL, and Florida Consumer Company License CF9901099. Partner Loans are made or arranged pursuant to their applicable lending license(s).

1 Rates, terms and maximum loan amount may vary according to the overall creditworthiness of the applicant and financing product selected. To see what your business may qualify for, apply today at no obligation.

2 The minimum FICO score requirement for a term loan with Funding Circle is a 620 personal FICO score of the business owner. If there is more than one business owner, then at least 50% of the business ownership must have a FICO score of 620 or greater.

3 Approval and funding times may vary by lending partner and financing product selected.