Business Loans for Women

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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). At Lendio, we’re working to provide a better startup financing experience with speed, options, and trust. Apply in 15 minutes to gain access to 75+ lenders.   See your options

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.

If you’re a woman looking for a small business loan or financing, the following options should be on your radar:

Equity-Free Capital Options

Angel investors aren’t the only avenue to funding a startup. Women only received 2% of venture capital (VC) funding in 2019. While there are VCs who prioritize funding female-helmed startups, they require you to give up equity in exchange for capital.

Business loans provide a better alternative to both of these solutions. Through online lending marketplaces, women can be more likely to secure funding, solving problem number 1. A business loan requires no equity, so you can maintain control of your business and control its growth trajectory. Boom, problem 2 solved.

Online Business Loans

The business lending landscape has gone well beyond banks, with alternative lenders offering loans online.

Some of the advantages of getting a loan for your business online include:

  • A streamlined application process. It’s possible to apply for a business loan online and upload your supporting documents in just a few minutes.
  • Qualifying may be easier. There are online loans to fit almost any credit profile, even if you have a 550 credit score. And it may be easier for newer businesses to get approved.
  • Faster funding. Some online business loans can be funded in as little as 24 hours.
  • Generous borrowing limits. You can borrow up to $2 million with an online term loan.
  • Flexible terms. Depending on the loan you choose, repayment terms may range from 3 months up to 5 years.
  • Competitive interest rates. Online lenders may offer interest rates for loans that are on par with the low rates associated with SBA or bank loans.
  • You may not need collateral. Online business loans are often unsecured, which means you don’t need to leverage any of your business or personal assets to qualify.

However, you may have to sign a personal guarantee if you’re getting a business loan with an online lender. This requirement also applies to SBA loans. You’ll find more information about SBA loans below.

A personal guarantee means you assume personal responsibility for the debt, even if you’re borrowing money for your business. If you default, the lender could attempt to attach your business and personal assets to recover the debt.

Something else to know: online business loans aren’t all the same. They include:

  • Term loans
  • Equipment financing
  • Working capital loans
  • Startup loans
  • Accounts receivable financing
  • Inventory financing
  • Purchase order financing
  • Business cash advances
  • Business lines of credit

Each of these loans can serve a different need for women business owners, and you can learn more about them all here. But to give you an example:

If you run a café, you might use a term loan to convert part of your back area into a patio for the summer. If you run a business with heavy equipment, you might choose equipment financing — to cover the cost of the equipment up front.

Business Credit Cards

If you don’t already have a business credit card, you should probably consider one. You can qualify for a business credit card as a brand new business. They allow you to use your everyday purchases to earn rewards and build business credit. On top of their everyday uses, business credit cards can be used as a flexible form of financing for a startup. If you need to make a larger purchase, you might want to open a business credit card with 0% introductory APR. With the proper research, you can use a business credit card in the same capacity as you might use a microloan for your business.


What Is an SBA Loan—and Why Is It a Good Option for Women Business Owners?

While the SBA doesn’t loan money directly to small businesses unless they’re eligible for disaster recovery, the SBA helps small businesses access funding by setting loan guidelines for small businesses and reducing lender risk. As a result, they can be one of the safest, easiest ways to access loans for women-owned small businesses.

What makes SBA loans so beneficial? They offer enviably lower rates, lower down-payment requirements, and larger borrowing allowances than private-sector lenders often offer, especially to newer or smaller businesses. And these benefits can help you to grow your credit and connect you, in the longer term, with other funding opportunities.

Types of SBA Loans

There’s an SBA loan option out there to cover just about every aspect of your woman-owned small business. Some of the most common SBA loans include the 7(a), 504, and SBA Express—but there are numerous others that may suit a particular need or aspect of your business.

SBA 7a Loan

There are 2 types of SBA 7(a) loans: SBA 7(a) Standard and SBA 7(a) Small Loans. They have similar rates and terms, but the Small Loan is capped at a maximum loan amount of $350,000.

The 7(a) is also one of the most flexible SBA loans. You can use it to:

  • Buy land
  • Cover construction costs
  • Buy or expand an existing business
  • Refinance your existing debt
  • Buy machinery, furniture, supplies, or materials

SBA 504/CDC Loan

SBA 504 loans can be a bit more complicated than 7(a)s. Because you must use a 504 to fund a specific fixed asset, a thorough examination of your project costs will come into play. When your loan is funded, the lender will initially cover 50% of your costs and the SBA will cover 40%—which means that you’re responsible for covering at least 10% right off the bat. You’ll also be required to personally guarantee at least 20% of the loan.

According to the SBA, “504 loans are available through Certified Development Companies (CDCs), SBA’s community-based partners who regulate nonprofits and promote economic development within their communities.”

You must use an SBA 504 loan to finance fixed assets, although some soft costs can also be included. Examples of qualifying projects include:

  • Buying an existing building
  • Building a new facility or renovating an existing facility
  • Buying land or making land improvements such as grading, landscaping, and adding parking lots
  • Buying long-term machinery
  • Refinancing debt incurred through the expansion of your business or the renovation of your facilities or equipment

SBA Export Loans

Is your woman-owned small business considering exporting goods to other countries? This is often seen by US lenders as a particularly risky option, and it can be harder to access funding as a result. But never fear: the SBA is here to help.

Check out the SBA’s export finance offerings, which include export loans, export express loans, and export working capital loans.

SBA Microloans

If you need a smaller amount of funding quickly to jumpstart your woman-owned small business, the SBA offers microloans—up to $50,000—for this exact purpose.

According to the SBA, microloans can be used for a wide range of purposes in order to rebuild, reopen, repair, enhance, or otherwise improve your small business, including towards:

  • Working capital
  • Inventory
  • Supplies
  • Furniture
  • Fixtures
  • Machinery
  • Equipment

An SBA microloan, however, cannot be used to purchase real estate or pay down debts.

SBA Disaster Loans

Hopefully, you’ll never need disaster loan assistance for your small business—but if the COVID-19 pandemic has taught us anything, it’s that we never know what lies ahead.

Unlike other SBA loans, which utilize an intermediary lender, the SBA administers disaster loans themselves. These are specifically earmarked, per the SBA, for “declared disasters, including civil unrest and natural disasters such as hurricanes, flooding, and wildfires.” This also includes the PPP and EIDL loans administered during the pandemic.

Types of SBA disaster loans include:

  • Physical damage loans to cover repairs and replacement of damaged physical assets
  • Mitigation assistance to cover small business operating expenses
  • Economic Injury Disaster Loans (EIDL) to provide economic relief to small businesses and nonprofit organizations that have suffered damage to their home or personal property
  • Military reservist loans to help eligible small businesses with operating expenses to make up for employees on active duty leave

Whichever type of SBA loan fits best for your small business, make sure to consider your options today—and Lendio is here to help!


Grants for Women Business Owners

A grant and a loan aren’t the same; grants generally don’t have to be repaid. But it’s worth mentioning grants for women in business as a funding option.

Businesswomen walking and talking

Grants can be tough to get because there’s often competition for them, but look for the ones specifically geared toward women. Federal and state government agencies offer some grants; nonprofits and private business organizations offer others.

The best thing you can do when it comes to finding grants to help fund your business is to keep a broad horizon. Here are some of the grant options we’ve found for women entrepreneurs:

Thinking of applying for a grant?

Read the application package from cover to cover to make sure your business is actually eligible and you understand what’s needed to apply.

It might be helpful to write up a checklist of things you need to complete the application if the grant package doesn’t come with one, just to stay on track.

Also, keep in mind that it can take months for your grant application to be reviewed. Be patient and you’ll know soon enough.


How to Apply for a Business Loan

Apply for a loan through Lendio, and you just need to complete a single 15-minute application to gain access to every loan option from our network of 75+ lenders. No application-spreading here. Once you complete the application, we pair you with a funding manager, your personal business finance expert, who will help you weigh each loan option to decide which one is right for your startup.

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“I was trying to expand my business to a second location. Lendio was a great help when others were not. My funding managers were able to explore all avenues for funding and walk me through the process in terms I could understand. Thanks for all your help, guys. My second store is now open!

Shelley W.

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