Running A Business

Microloans for women-owned businesses

Feb 04, 2022 • 9 min read
women-owned businesses need financing and loans
Table of Contents

      Women own 42% of all U.S. businesses, have 9.4 million employees, and $1.9 trillion in revenue, according to findings by the National Women’s Business Council (NWB). But even though they’re now slightly more likely than men to start businesses, women continue to face unique challenges in access to financing. According to the Federal Reserve Banks Small Business Credit Survey, women-owned businesses apply for financing at similar rates to businesses owned by men but are less likely to receive the full amount they sought (43% vs. 48% of men).

      About business loans and financing for women-owned businesses

      The good news is that business loans for women aren’t out of reach. There are several loans women can use to run and grow their businesses, whether they need a source of short-term working capital or funding for a large-scale investment.

      Microloans for business owners

      Microloans are what they sound like: small loans.

      These loans are typically much smaller compared to the other loan options discussed so far. They can be a good fit for owners who:

      • Haven’t been in business very long
      • Have smaller annual revenues
      • May not be able to qualify for other business loans, based on their credit
      • Don’t need as much financing for their business

      A microloan is worth considering for home-based business owners with smaller operating costs or mobile business owners, like food truck operators or DJs.

      Microloan programs

      Both for-profit and nonprofit organizations offer microloans to women, as well as minorities, and other business owners.

      SBA microloan program

      The SBA’s microloan program offers up to $50,000 in funding for qualifying businesses. According to the SBA, the average microloan is $13,000. The maximum loan repayment term is six years, and interest rates range from 8% to 13%.

      You could use it to:

      • Meet your working capital needs to cover initial expenses
      • Buy inventory or supplies
      • Outfit your business premises with furniture or fixtures
      • Buy necessary machinery or equipment

      The only thing you can’t use a SBA microloan for is refinancing existing debt or purchasing real estate.

      Securing an SBA microloan

      Obtaining an SBA microloan follows a specific process. Here’s a summary of the steps involved:

      1. Identify an intermediary lender – The SBA doesn’t provide microloans directly. Instead, they partner with intermediary lenders, which are usually nonprofit organizations. You can find a list of these organizations on the SBA’s website.
      2. Prepare your business plan – Before you apply for a microloan, you’ll need to prepare a comprehensive business plan. This plan should include details about your business, your market analysis, and your organization. It should also include your management structure, product line or service details, marketing and sales strategy, and financial projections.
      3. Gather necessary documents – Be ready with your legal documents, business and personal bank statements, balance sheets, income tax returns, and credit report.
      4. Submit your application – Apply directly to the intermediary lender. Each lender has its own application process and requirements, so it’s crucial to review these details on their website or contact them directly.


      Accion is a nonprofit that offers up to $50,000 in microloan funding to brand-new and established women-owned businesses. The amount you can borrow depends on which state your business is located in.


      Kiva is a nonprofit that offers crowdfunded microloans of up to $10,000 with no interest. Repayment terms stretch up to 36 months. The program operates on a peer-to-peer lending model, whereby individuals invest as little as $25 in a borrower’s business. Kiva U.S. enables entrepreneurs to leverage their community for the first 25% of the loan during a private fundraising period. After reaching this threshold, their campaign is opened to Kiva’s wide network of lenders worldwide. These loans—which have a repayment term of up to 36 months—can be used for a variety of business-related expenses, such as buying inventory, hiring staff, or purchasing equipment.

      Grameen America

      Grameen America is a nonprofit microfinance organization that provides small loans to women who live below the poverty line in the U.S. They offer microloans ranging from $2,000 to $15,000. Established by Nobel Peace Prize laureate Muhammad Yunus, the organization follows a peer group model. This means that when a woman receives a loan, she must form a group with four other women who will also receive loans. The group meets weekly for financial training and to make loan repayments.


      LiftFund is a nonprofit organization that provides extensive small business support in the form of microloans, larger loans, and business education. Their microloan program offers up to $50,000 for startups and up to $1 million for established businesses. The interest rates are competitive, and LiftFund prides itself on providing loans to those who have limited access to capital from traditional sources.

      Microloan eligibility requirements

      As with any other loan, take your time to review your financial position, the interest rate, repayment terms, and the minimum requirements to qualify.

      To qualify for a microloan, business owners typically need to meet certain criteria. These might vary depending on the lending organization, but here are some common requirements:

      • Good credit score – Lenders often look at your personal credit score as an indicator of your financial responsibility. A good credit score can increase your chances of securing a loan.
      • Business plan – Most lenders require a comprehensive business plan that outlines your business operations, target market, financial projections, and marketing strategy.
      • Proof of income – You may need to provide proof of a stable income, demonstrating your ability to repay the loan.
      • Collateral – Some lenders may ask for collateral to secure the loan.
      • Training or counseling – Certain programs require you to participate in business training and planning sessions before granting the loan.
      • Legal documentation – Be ready to provide legal documents relating to your business, such as your business license, incorporation documents, and any lease agreements or contracts you have.
      • Business age – Some microloan programs cater to newer businesses, while others might require your business to have been operational for a certain period of time.
      • Residency – Many programs require borrowers to live in a specific area or region to qualify for a loan.

      Applying for a microloan

      Applying for a microloan involves a series of steps that are generally similar across different lenders, with some minor variations.

      1. Identify your needs – The first step is to identify your funding needs and how a microloan can help fulfill them. Consider the amount that you’ll need, how you plan to use the loan, and how you will repay it.
      2. Choose a lender – Next, research various microloan lenders to find one that suits your needs. Consider factors like the loan amount, interest rates, repayment terms, and the lender’s reputation.
      3. Prepare a business plan – Most lenders will require a business plan that outlines your business model, forecasts your revenues, and demonstrates how the loan will be used to grow your business.
      4. Compile necessary documentation – Gather all necessary documentation. This typically includes financial statements, tax returns, and personal identification documents. It’s also common for lenders to ask for a credit report.
      5. Complete the application – Complete the lender’s application form. This could be online or in person, depending on the lender. Be sure to provide detailed and accurate information.
      6. Wait for approval – After submitting your application, there may be a waiting period while the lender assesses your application. During this time, they may ask for more information or clarification on your application.

      Remember, every lender may have slightly different procedures. It’s always best to check with your chosen lender for specific instructions on their microloan application process.

      Quickly compare loan offers from multiple lenders.

      Applying is free and won’t impact your credit.

      About the author

      Lendio's team of experts is here to help you with every nook and cranny of your business. We'll make sure you have the best advice for financing, operations, management, hiring, and much more.

      Share Article:

      Business insights right to your inbox

      Subscribe to our weekly newsletter for industry news and business strategies and tips

      Subscribe to the newsletter

      Subscribe to our weekly newsletter for industry news and business strategies and tips.