The best small business loans for women

The number of female entrepreneurs in the United States is on the rise. In fact, recent research conducted by Kauffman indicated that more than 40 entrepreneurs in the United States are women and the number of female entrepreneurs is increasing at a double rate compared to their male counterparts. Unfortunately, it is only a small percentage of women who get access to capital to start and run a business. There are quite a number of challenges that women entrepreneurs face during their interactions with customers and colleagues. Getting access to business financing, therefore, shouldn’t be another challenge. The bad news is that there are no business loans specifically for women. However, there are direct lenders who focus on offering business loans for women. Besides, women-only business grants are also available which can help women grow their businesses.

Business Loans for Women
Business Loans for Women

Best business loans for women

The major reception experienced in 2008 led to fewer banks offering small business loans. Very few people who apply for loans in financial institutions have the loan approved compared to those who work with direct lenders. The reason behind this can be the fact that many small businesses generate low revenue during the startup period. Women industries are also underfunded which is also the main reason why most women close their business after only a few years of operation. The good news is that SBA loan programs are available with online lending making it easier for women to access business financing. This comes as a relief for million women owned businesses. Here are some of the best women business loans available;

  • SBA loans
    These types of loans are helpful for women who have good credit and need long-term loans. SBA loans are among the easiest way for women to access business funding. Banks and direct lenders are the ones who offer the loans, which is subsidized by SBA in case the female entrepreneur defaults. The loans are guaranteed by the government, which means that they are less risky and especially when starting up a business. For women who qualify, this can be a great business financing option. SBA loans incur an interest rate of between 4% and 9% and have a loan term of more than 7 years. In the SBA microloan program, women can access up to $50,000 for both start-up and micro businesses.
  • Online loans
    Online SBA loans for women are a great option for women business owners who need quick funding and have a strong or poor credit score. Many lenders offer online business loans with a loan term of between 3 and 18 months, although there are also lenders who offer a longer loan term. The loan is especially useful for women who can’t access a business loan in lending institution due to poor credit history. Online loans are also the best option for businesses to get access to quick funding. Most lenders can have your loan approved within one business day. There are also lenders who offer lower rates on the loan for borrowers with good credit history.
  • Business lines of credit
    For women entrepreneurs who need more flexibility when using funds, a business line of credit can be a good option. More women are focused on retail and food industry, which is essential for them to have more flexibility in funding. Business lines of credit are easy business loans where you will access a specific amount of money. However, a little percentage of the funds is withdrawn at a time. Most lenders offer low rates line of credit and can be helpful for women who have been in business for only a few years.
  • Microloans for female entrepreneurs
    At times, you may need a small amount of capital to get your business on foot. Many women run home businesses or sole proprietorship. For such women, it can be quite difficult to access funds in banks. In this case, microloans can be the best option. The loans are also available for women who want to start a business.
  • Small business grants for women
    This is also another business financing option available for women. Business grants are actually ‘free money’ since you won’t have to pay it back compared to loans that have to be paid after a certain period of time. However, there are more restrictions when it comes to using the money compared to small business loans. This makes business loans a more realistic option for businesswomen. There are 3 main types of grants that women entrepreneurs can search for when looking for business financing.
  • Federal grants
    These grants are normally restricted to specific industries. This may be medical research, technology or agriculture. is the best place to start searching for a federal grant that you qualify for. However, it is important to note that federal governments may not offer grants to business startups. The grants are mainly issued to companies that meet size standards established by SBA among other requirements.
  • Grants from private organizations
    These grant types are also widely available. However, a lot of women apply for private grants for women, making them highly competitive.
  • State and local grants
    There are more grant options available in state and local governments compared to those in the federal government. You can search your state website to find available grants.When it comes to business funding, it is important that you not only rely on business grants. However, it is prudent to submit your application if there are chances of your small business qualifying for the funds. You never know, you may just be lucky enough to take home the price.

Best venture capital firms and angel investors for women in business

Debt financing and equity financing are also ways in which you can raise money for your business needs. With debt financing, you can borrow money from a lender, which is paid with an interest rate over a period of time. In equity financing, the business has to raise money from investors and venture capital whereby the get a portion of business ownership in return.

If you need a large amount of money for your business, working with an investor can be the best option. You also have the advantage of getting business advice from the investors. But unless your business is growing rapidly, it can be quite challenging to find investors. It can also be challenging for women to convince VC firms to invest in their business, and especially when they are not familiar with your products or services. This makes direct lenders the best option when it comes to finding business loans for women.

Why apply for business loans?

Being a female business owner comes with several challenges, the main one being getting access to funds. This does not only affect startup businesses. Successful ventures may also require funding from time to time which is important for female small business owners to look for small business loans for women that meet their business needs. Selecting the best loan is as important as accessing the funds. With the best loan, it means that you need to consider different factors which include the loan cost and repayment options. These two can have a great impact on your business. Women are also advised to work with lenders who understand their needs.

One advantage of requesting loans for women from direct lenders is that the funding process is simple and straightforward. Most lenders also do not charge upfront fees and the loan can be approved in as soon as 24 hours. Business loans have flexible repayment options and women with poor credit can also qualify for the loan.

Bottom line

Access to funds is one of the things that hinder business growth. Luckily, many lenders offer loans for women to start business and there is a wide variety of loan options to choose from. All you need to do is compare different lenders for you to come up with an affordable loan to meet your business needs. If you are wondering about where you can easily get funds to start, expand or buy inventory for your business, fill out an application form today and have your loan approved when your business really needs it.

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