While women are responsible for more than 9 million jobs and own 42% of all businesses, they receive only 4% of conventional small business loans. As a result, they are often overlooked for funding and forced to find creative ways to meet their financing needs. That’s why it’s important for women to research the many different business loan options available. In the article below, we highlight some of the best small business loans for women owned businesses.
The Small Business Administration (SBA) offers several different lending programs designed to support women-owned businesses. These include microloans, which can provide startup capital and are especially well-suited for startups, as well as 7(a) and Community Advantage business loans, which offer general-purpose working capital to existing businesses. Typically, these loans come with competitive interest rates and long-terms, meaning they’re an excellent option for women entrepreneurs who don’t qualify for mainstream loans.
Alternative lender programs and nonprofit organizations, such as community financial development institutions (CDFIs), can also be good sources of small business loans for women. These lenders focus on helping businesses in underserved communities and may have more flexible qualifications than traditional lenders. Other potential funding options for women-owned businesses include merchant cash advances, which allow borrowers to borrow against future credit card receipts, and invoice financing, in which you’re borrowing against outstanding customer invoices.
Of course, it’s not always possible to get the type of small business loan you need, so you should explore all of your options. This includes federal, state and organizational grants that don’t require repayment. You should also consider becoming a certified woman-owned small business (WOSB). This can help you secure government contracts, as well as take advantage of special provisions like set asides that the government earmarks for minority and women-owned businesses. small business loan requirements