6 Best Small-Business Loans for Women of March 2021

Types of small-business loans for women

Lenders may advertise small-business loans for women, but programs that specifically prioritize female entrepreneurs are hard to come by.

Still, women-owned companies may be able to tap into multiple types of business loans, including:

• SBA loans. If you have solid finances and an established business, consider an SBA loan. Banks, online lenders and other financial institutions offer these loans, which are backed by the U.S. Small Business Administration. Women who own more than half of a small business received 14%, or $1.1 billion, of the SBA 7(a) loans approved in fiscal year 2020, according to the SBA.

• Bank business loans. Small-business loans from banks typically come with the lowest costs but toughest eligibility qualifications. In 2016, large banks approved 50% of women-owned business applications and small banks approved 67% — the highest among all funding sources — according to the most recent data from the Federal Reserve. However, overall bank approvals have shrunk greatly since then, with Biz2Credit’s most recent data finding 13.2% and 18.3% approval rates at large and small banks, respectively.

• Online loans. If you have a lower credit score (a FICO score between 300 and 689) or have been in business for less than two years, an alternative online lender could be a good choice. These lenders offer multiple products (including terms loans, lines of credit and invoice factoring), specialize in speedy funding and have looser eligibility requirements than banks. The trade-off for those conveniences is borrowing costs may be higher than other options.

• Microloans. The SBA offers microloans through nonprofit organizations. For example, Grameen America provides loans of $2,000 to $15,000 to entrepreneurial women who live in poverty; other SBA microlenders may offer funding up to $50,000. Microloans can be a good option if you can’t qualify with a bank or online lender or have a small financing gap. Find providers in your area on the SBA website.

» MORE: Best small-business loans for minorities

Funding options for women-owned startups

It can be hard to qualify for a business loan if you haven’t been operating for at least a full year. Most lenders want to see a track record of strong finances, a solid direction for the business and an ability to repay debt.

But in addition to options like microloans and crowdfunding, there is other financing for startups.

For example, if you have good personal credit, you may qualify for a personal loan for business. Most personal loans are unsecured, and some loan amounts go as high as $100,000.

Business credit cards also offer financing for women-owned small businesses who are starting out or looking for working capital.

Other resources for female entrepreneurs

Government and nonprofit organizations offer free assistance to women entrepreneurs. These programs may provide women with help completing steps to getting a small-business loan, like writing a business plan, and guidance on topics like starting a business, financial management and marketing.

Grants

Women-owned businesses can get free funding through grants from government agencies and nonprofit organizations. Here are places to look for small-business grants for women.

Women’s Business Centers

The Women’s Business Centers are a network of more than 100 educational centers around the United States that help women start and grow their businesses. These SBA-funded centers typically offer seminars and workshops on a range of topics, including how to start a business and raise capital.

Federal Contracting Programs

The SBA-run Women-Owned Small Businesses Federal Contracting Program is for women-owned businesses that are interested in government contracts. Women can also apply for a certification from the SBA 8(a) Business Development program, which allows all “socially and economically disadvantaged people or entities” (including women) to compete for set-aside federal contracts.

Ascent Online Learning Platform

Ascent is a free digital tool launched in 2021 as part of a joint initiative between the White House, SBA, the U.S. Department of Labor’s Women’s Bureau and the U.S. Department of the Treasury. This online platform offers tools, quizzes and other learning resources designed to help women entrepreneurs who are looking to grow their businesses.

National Association of Women Business Owners

The National Association of Women Business Owners, based in Washington, D.C., has 5,000 members and nearly 60 chapters across the country. It offers training and information on topics such as access to capital, government contracting and business certification.

National Women’s Business Council

The National Women’s Business Council works with the Office of the President, Congress and the SBA on issues related to women business owners. Resources include help for startups, alternative lender programs, conferences and mentor groups.

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