Business Loans for Women
According to a 2018 study by online credit resource Biz2Credit, the average business loan amount for female-led businesses is 31% smaller than the same amount for male-led companies. This gender gap in financing can create major challenges for women entrepreneurs trying to launch a new company, grow an existing business, or expand into different markets. However, it is not impossible to find small business loans for women and other funding opportunities that can help them reach their business goals.
The Small Business Association (SBA) offers a number of financing solutions that are specifically tailored toward women-led businesses. Since these business loans are government-backed, they can offer more flexible requirements than traditional bank financing products. This means that it is less likely that women-led businesses will be turned down for a business loan if they don’t meet the strict requirements that are typically imposed by large banks.
These SBA loans can range from short-term three to 18-month loans for working capital to larger two to five-year business loans for working capital, as well as longer-term financing such as invoice financing and lines of credit. In addition to these loans, the SBA also has a microloan program that lends small amounts of money to startups and micro-businesses that would not normally qualify for conventional business loans. The SBA Community Advantage loan program also has more flexible qualifications that make it a good option for women-led businesses that don’t fit the standard lending criteria of the 7(a) business loan program.
Another type of business financing for women that is available is equity financing from venture capital (VC) investors. In exchange for a portion of the ownership of your company, these investors can provide you with large amounts of funding to fuel your business growth. However, the process of finding and working with an investor can take a significant amount of time and effort.
Other small business financing options for women include revolving line of credit business loans and business credit cards. These types of financing are a great option for women entrepreneurs who have a strong business credit report and a history of repaying debts on time.
Many local and regional organizations also have business loan programs for women that can help them grow their business. These resources can be found by contacting your local chamber of commerce or visiting a local SBA support center to learn more about the programs that are available in your area. Some of these programs are geared towards specific industries, while others focus on supporting women-led businesses in low-income or disadvantaged communities. There are also several national and international philanthropic organizations that offer financing for women-led companies. These organizations often offer flexible requirements and technical assistance, making them a viable option for entrepreneurs seeking an alternative to traditional banking financing. These groups can provide small business loans for women with competitive interest rates and flexible repayment terms.