Small Business Loans for Women

Business Loans Options for Women Entrepreneurs

Women entrepreneurs are at the forefront of an impressive transformation in the US economy, owning two out of every ten businesses. They employ over 10.1 million individuals and generate $1.8 trillion in revenue each year.

Yet, they face significant obstacles in securing financing. A report by the Federal Reserve indicates that funding applications from women are less likely to receive full approval compared to those from male entrepreneurs.

Here are the top funding options for women entrepreneurs in 2024.

Term Loans

Business term loans provide funding in a one-time, lump-sum format. Borrowers repay their funding amount, plus APR, over an agreed-upon schedule.

This type of financing is best suited for longer-term projects, where you know the exact costs of your investment and plans that won’t yield an ROI immediately. For example, a restaurant seeking to build out a new location might use a term loan because the new location won’t start generating revenue until construction is completed.

Term loans are available at banks, credit unions, non-bank lenders, and SBA lenders. Each lending type carries different eligibility requirements, interest rates, and terms, so be sure to explore all of your options before finalizing a contract.

Business Lines of Credit

Business lines of credit offer flexible access to capital on an as-needed basis. Interest applies only to the amount drawn, not the total credit limit, which allows for a wide variety of use cases.

Even so, business lines of credit are better suited for recurring capital needs and projects where you don’t know the exact cost. This is because the “draw as-needed” structure allows businesses to quickly and easily access funding, unlike more rigid products, where the business would have to go through the entire loan process again.

Business lines of credit do, however, come with higher interest rates than other financing solutions. This isn’t always a challenge because of the favorable interest structure, but it’s worth mentioning to avoid sticker shock on your approval. Offering collateral or signing a personal guarantee can serve to improve your terms.

Revenue-Based Financing

Revenue-based financing works similarly to business term loans but with a few unique differences. Commonly referred to as “business advance” or “merchant cash advance,” it’s provided in a one-time lump sum payment but can come with flexible renewal options that can function like a line of credit.

Instead of an interest rate or APR, revenue-based financing comes with a factor rate, generally ranging from 1 to 1.7. This number is multiplied by your funding amount to determine the cost of capital minus fees and other lender-specific costs. Much like an interest rate, the factor rate you’re given depends on your business, the lender you’re working with, and many other factors.

Repayment is a bit different, too. Businesses repay their borrowed funds through regular deductions from their business’s sales, usually on a daily or weekly schedule. The payment amount varies depending on your sales, so you’ll pay less on days when your business generates less.

This type of financing is most often short-term and rarely extends past 18 months. For this reason, it’s better suited for shorter-term projects, where you’ll see an ROI within the repayment.

SBA Loans

Small Business Administration (SBA) loans are some of the most attractive financing options available to businesses nationwide. They feature low interest rates, funding amounts of up to $5MM, and a variety of different use cases.

Still, SBA loans come with strict eligibility requirements. Not only will you have to meet the size requirements and fall within the SBA’s eligible industries list, but you’ll also need to meet their robust credit score, time in business, and annual revenue requirements, which mimic that of banks and credit unions. Failing to meet these requirements – or including an application error of any capacity – will result in a denied application.

The SBA’s funding process is also notoriously lengthy. Some businesses wait 8 months to finalize the process, while others are still waiting after a year. At National Business Capital, we’ve streamlined the process to 45 days by preparing each client for every step of the process.

Asset-Based Lending

Asset-based lending “unlocks” the value of your assets. Credit score, revenue levels, and time in business play less of a role in determining eligibility because the collateral already offers a layer of security for the lender.

This type of financing has many different forms, including equipment financing, accounts receivable financing, purchase order financing, and other business loans and financing options. Since they require an asset, they often don’t require additional collateral because your equipment, accounts receivable, or purchase orders fill that requirement.

Asset-based lending is offered by banks, credit unions, and non-bank lenders, although there are some specialized lenders for specific industries. Funding times are a bit longer than other forms of financing, too, because the collateralization process takes some time.

Pros & Cons of Business Lenders

In general, business loans for women can take the form of SBA loans, bank and credit union loans, online lender loans, and microloans. Take a look at how each of these funding types compare to one another.

Do Women Qualify for Minority Business Loans?

Yes, women qualify for minority business loans. Although some minority business loans may be geared towards a certain group, oftentimes, women are included.

The SBA offers a number of programs specific to minority business owners and female entrepreneurs, such as the 8(a) Business Development Program. You can also browse local SBA resources here. Plus, there are certain funding programs and grants available only to women. You can view a complete list of grants for female entrepreneurs here.

How Do Small Business Loans for Women Work?

Small business loans for women work the same way as they would for any entrepreneur going through an application process for funding. It starts with an online application, the provision of basic personal, business, and financial details, as well as the submission of a bank statement. Applicants may also want to consider multiple lenders and different financing products to find the best fit.

Small business loans for women have been historically slightly harder to obtain. This is due to women having, on average, lower credit scores than men and additional roadblocks like discrimination, lack of mentorship, unequal familial responsibilities, and more. Women also have a tendency to ask for less funding than their male counterparts.

Despite these challenges, women-owned businesses have, time and time again, proven to be successful – even outpacing male competitors in many cases. It may help to compare numerous small business loans for women at once.

With National Business Capital, you can do exactly that with a single application. Some of the benefits of using our top-rated business financing marketplace include:

• Compare and contrast multiple business loan offers from a network of top B2B lenders.
• Flexible requirements – we work with businesses with all types of credit scores, a minimum of 3 months in business, and at least $120,000 in annual revenue.
• A wide range of business financing products – from SBA loans to lines of credit, revenue-based financing, and everything in between.
• Fast, simple application process that takes less than a couple of minutes to complete.
• Quick funding times – think about having your funds deposited in about a day or less.

Can I Get Small Business Loans for Women With Bad Personal Credit?

Although bad personal credit can make it harder to secure business financing, small business loans for women and other types of funding can still be an option. Online lenders typically have products for all types of credit scores.

For one thing, if your business’s finances are in good standing – if you have good business credit and strong revenue – your odds for funding will improve.

If you’re still struggling, consider looking into a grant specific to women-owned businesses or taking the time to improve your creditworthiness before applying again.

Is It Hard for Women to Get Small Business Loans?

Generally, small business loans for women are harder to get because women tend to have lower credit scores than men, which may prevent them from being able to secure financing – especially from traditional lenders like banks. Other factors, such as discrimination, lack of mentorship, heightened familial responsibilities, and more, can also play a role in holding back female entrepreneurs from securing financing.

Given the total revenue generated by women-run firms, it is clear that small business loans for women are essential to help fuel the overall economy.

Yet most of these success stories would not have been possible without financial support when it was needed most. Entrepreneurs who leverage financing are able to invest in marketing, research new ideas, buy inventory, hire talent, and much more.

Financing can help you get a leg over the competition and reach new levels of growth. Unfortunately, all too often, female entrepreneurs aren’t obtaining enough financing.

Even when female entrepreneurs do seek out financing, they’re likely to ask for roughly $35,000 less than men. Despite these challenges, female entrepreneurs continuously overcome their adversaries to reach new heights of success – even outperforming their male counterparts in many cases.

Women-founded companies in venture firm First Round Capital’s portfolio have outperformed companies founded by men by 63%. Private tech companies led by women have also achieved a 35% higher return on investment (ROI).

As the SBA also states that the amount of startup capital is a “strong predictor of business success,” where do female business owners, especially those seeking small business loans for women with bad credit, look to find the working capital their businesses require?

Small Business Loans for Women: How to Apply

Applying for a small business loan through National Business Capital is a simple, easy, and straightforward process. Here’s what to expect.

• Apply Securely Within Minutes – Move through our streamlined application within minutes and upload your business documents with zero risk.
• Review Your Offers – Compare your offers with expert advice from our team and select the best one for your specific circumstances.
• Receive Your Money – Seize an immediate opportunity to grow your business or tackle a new challenge with confidence.

Don’t waste your time applying to lenders one by one. Complete our digital application to unlock the most competitive offers your business qualifies for.

Why Work With National Business Capital?

Having ready access to working capital can mean the difference between closing your business’s doors or outpacing the competition.

At National Business Capital, we believe every entrepreneur should have equal access to funding solutions, and we’re particularly passionate about promoting small businesses – especially those owned by women.

That’s why we make it fast and easy to find and compare the best small business loans on the market. Instead of filling out numerous applications and waiting for decisions on each one, you fill out one digital application and receive multiple competitive offers, all of which are personalized to your unique business.

Our team of expert Business Finance Advisors is knowledgeable in almost every industry, meaning we “get” your specific circumstances. We’ve seen your situation before, and if we haven’t, you can count on us to do our research until we fully understand the circumstances you’re in.

Don’t set your plans aside; Grow with the experts at National Business Capital. With the utmost speed, transparency, and professionalism, you can trust our award-winning team to find the right lender for your business.