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Small Business Loans for Women

The Need for Loans for Women-Owned Businesses

Did you know that 42% of all US businesses are owned by women? Women-owned businesses generate $1.8 trillion a year according to the Women’s Business Enterprise National Council.

They’re also growing at an increasingly pronounced rate. For this reason, the accessibility to small business loans for women is essential for the growth and development of women-owned businesses. From 2014 to 2019, their number increased by 21%.

For comparison, all businesses on the whole increased by only 9% over this time period. Top sectors for female entrepreneurs include: professional, scientific and technical services, health care and social assistance, accommodation and food services, and real estate and rental services.

Despite the significant contributions female entrepreneurs bring to the economy, just 25% will seek business financing. Considering how important financing is for a business’s growth and success, lack of funding for women-owned businesses is an issue that needs to be addressed.

Here’s everything you’ll need to know about small business loans for women and where to get one.

Why is it so 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 that obtain 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 oftentimes 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 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?

What business loans are available for women?

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.

Small Business Administration (SBA) Loans

Pros

  • SBA loans feature low-interest rates, high funding amounts, long terms, and can be used for almost any type of business expense.
  • They’re great for hiring staff, purchasing inventory, launching new products, or expanding your business.
  • You can choose between:
    • SBA 7(a) loans: One of the SBA’s most popular loan programs, 7(a) loans offer up to $5 million in funding with repayment terms as high as 25 years.
    • SBA 504 loans: Another long-term, fixed rate financing option of up to $5 million to purchase major fixed assets.
    • SBA 8(a) Business Development program: Although not technically a loan, this program offers valuable business assistance to traditionally marginalized small business owners, especially when it comes to government contracting opportunities.
    • SBA microloans: Offered up by local non-profits, these loans are designed to help small businesses and can be up to $50,000 in funding amounts.

Cons

  • SBA loans can be fairly difficult to qualify for.
  • You’ll likely need good credit, at least 2 years of business history, and be able to meet the SBA’s size standards.

Bank and credit union small business loans

Pros

  • These institutions can offer lower interest rates and more favorable terms.
  • They also have many options, such as term loans, business lines of credit, equipment financing, and more.

Cons

  • Banks and credit unions have strict lending requirements, which can exclude some female entrepreneurs from funding.
  • At a minimum, you’ll need good credit, 2 years of business history, strong revenue, and maybe even collateral.
  • Small business funding approval rates at big banks stood at a mere 14.2% in November 2021.
  • Banks and credit unions also have notoriously long application processes, which may not make them a good fit if you need funding fast.

Business loans from online lenders

Pros

  • Small business finding approval rates are higher at online lenders than banks and credit unions.
  • Online lenders tend to be more lenient and offer funding options for younger, smaller businesses and those with less than perfect credit.
  • They also have a wide range of lending products, including term loans, lines of credit, merchant cash advances, invoice financing solutions, and more.
  • Plus, online lenders are known for having incredibly fast application processing times. You may even be able to have your funds deposited in 24 hours or less.

Cons

  • Online lenders can be more expensive. Especially if you have poor credit, your interest rates may be higher than those on bank loans.

The majority of women seek alternative funding. National Business Capital, a leading alternative lender offers many financial options for women business owners to consider.

These range from SBA loan programs, the majority of which have been historically awarded to women. Our Business Consultants will gladly guide applicants for these funding instruments and keep them apprised of every step of their loan process.

National also realizes that anyone who has started a business and put their finances on the line for it may have a lower FICO score than average. This does not disqualify any applicant from receiving a small business loan for women through National.

We look at the entire picture and use realistic underwriting criteria in making our loan decisions. Our Business Consultants take the time to get to know our clients and will work hard to locate small business loans for women with bad credit.

Over 70% of our borrowers had their loan applications declined by their banks before coming to us. We are justly proud of our over 90% approval rate and will strive to assist you to find the financing your business requires.

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 then 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 to using our top-rated business financing marketplace include:

  • Compare and contrast multiple business loan offers from over 75 different 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, to merchant cash advances, and everything in between.
  • Fast, simple application process that takes less than a couple of minutes to complete.
  • Quick funding times - think having your funds deposited in about a day or less.

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.

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 for women-owned businesses or taking the time to improve your creditworthiness before applying again.

Empowering women-owned businesses

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

At National, we believe every entrepreneur should have equal access to the funding solutions, and we’re particularly passionate about promoting small business - 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. Our top online business financing marketplace allows you to compare numerous solutions from over 75 different lenders to select the best fit.

Our team of experts are on stand-by every step of the way to ensure you have all your questions answered and your needs met. Our funding solutions work fast, and you could have the capital you need in mere hours after applying. Compare different small business loans instantly! Get started here.

Take the Next Step

Women-run businesses make a sizable contribution to the Nation’s GNP. However, National Business Capital understands that earlier financial sacrifices to keep their business going may have contributed to a lower FICO score.

Therefore we do not deny small business loans to women with bad credit. If your firm requires working capital to achieve your business goals, talk to us. We take a personal interest in our clients and their enterprises. We’ll work hard to locate the right funding to assist your business to achieve its goals. Call us today at: (877) 842-3008, 1-minute online application or fill out our today to get started!

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