Small businesses and start-ups have been growing at a fast pace and women have started contributing more than men according to the surveys. Whether it is SBA programs for women or online lenders, it is the consistent efforts in providing loans and financing women-owned businesses in 2022.

Are you struggling to fund your business and want to know the available options? Here in this blog, you’ll know the range of best business loans for women, their application process, loan approval requirements to finally get funded and allow you to fulfill your working capital and diverse business needs.

Best Small Business Loans for Women

Funding women-owned small businesses don’t seem unattainable in 2022. With many types of loans and available finance options, you can use the following financing resources to run and grow your business according to the business requirements. No matter whether it is short-term working capital or large-scale investment, here are some small business loans for women:

Types of Small Business Loans and Financing for Women

types of small business loan

Know your business needs and choose the following loans and financing for women options that suit you best.

1. SBA 7a Business Loan

SBA is partnered with lenders to meet the funding needs of women and small business owners in the US. SBA 7a business loan is a great financing option for women-owned small businesses. Its structure is designed by keeping in mind the long-term funding needs for women.

You can reap the benefits from SBA 7a up to the loan amount of $5 million. When considering repayment terms, the loan provides 5-10 years and 25 years for real estate financing to repay the amount you’ve taken.

Also, you’ll need at least a 680 credit score or more to ensure you get the loan. The 7a SBA loan can be utilized for working capital needs, refinancing existing business debt, purchasing equipment, inventory, and materials, and updating or renovating existing business premises.

If you’ve been rejected for a loan elsewhere, a 7(a) loan could lend you a sufficient amount of funds to grow your business. As a woman, make sure you meet the credit score requirements and all the eligibility criteria to successfully finance your small business.

2. Online Business Loans

The business loan lending process has gone beyond banks and there are online business loans now becoming handy to avail. Online services are one of the best loans and financing for women startups. Here are some advantages and reasons of applying for a loan for your business because the online business loan can have:

  • Streamlined application process
  • Easy documentation by simply uploading supporting documents in a few minutes
  • Easy approval and qualification for the applied loan
  • Low credit profile and can be approved at minimum credit score
  • Fast funding within 24 hours
  • Generous borrowing limits to borrowing up to $2 million with an online term loan.
  • Flexible repayment terms ranging from 3 months to 5 years.
  •  Lower interest rates

For the online business loan to get access from an online lender, you’ll need to sign a personal guarantee. A personal guarantee means you assume personal responsibility for the debt, even if you’re borrowing money for your business.

Apart from that, online business loans vary based on the period, amount, and many other factors. Check out the following online business loans:

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

Each of the above online loans can serve different women-owned business needs.

3. SBA Express Loans

Most of the SBA finance programs aren’t the fastest and could take weeks or even months to get processed, approved, and for the loan to be funded. That’s why SBA express loans come in the presence of women-owned small businesses which speed up the process of approval and makes borrowing fast.

It can still take several weeks to be funded but usually have a much faster process than SBA 7(a) loans.

Here are some details about SBA Express loans:

  • Avail loan up to $350,000
  • Requires collateral for loans over $25,000
  •  Less paperwork and documentation are required in the application process
  •  650 is the Minimum credit score required
  •   Need strong revenues to qualify

The interest rates on SBA Express loans and financing for women are different from 7(a) loans i.e. prime rate of 5.5% plus 4.5 to 6.5%. That means they are more expensive options than 7(a) loans.

Express loans could cover all the business needs those 7(a) loans can cover in smaller amounts.

Moreover, SBA Express loans can be a more flexible funding choice for women and use it as a revolving line of credit.

4. Microloans

As the name suggests, Microloans are small loans to fund small businesses for women.

They are comparatively much smaller than other SBA and online loans discussed above and can help women entrepreneurs to start a new business.

A microloan is a good fit if you are a women-owned small business that:

  • Haven’t been in business that long
  • Have smaller revenue needs annually
  • Couldn’t qualify for other business loans because of my credit score
  •  Fewer finance requirements for business
  • Have a home-based business with smaller operating costs

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 6 years, and interest rates range from 8 to 13%.

You might be wondering how you can use microloans. Here is how you can use it:

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

While you can use microloans for the above-mentioned needs, you can’t spend it on real estate or refinancing existing debt.

In order to borrow microloans, you can go to both for-profit and nonprofit organizations offering microloans to women, as well as minorities.

However, it is always better to review your financial position, the interest rate, repayment terms, and the minimum qualification requirements.

5. Grants for Women Business Owners

Grants aren’t similar to loans and you don’t have to repay the borrowed amount. It can another be a great option to fund women with small businesses and meet their needs.

 Grants are highly competitive among small businesses and start-ups. So, find those grants lenders that are specifically designed for women.

Only Federal and state government agencies offer some grants while private business organizations offer others.

The right thing you can do when getting funded using grants is to keep a broad horizon.

So, if you are thinking of applying for a grant, make sure to read the application package to know whether your business is eligible or not and understand what’s needed.

Also, keep in mind that it could take months in reviewing your grant application.

Other Resources for Women-Owned Small Businesses

In addition to these loans, investments, and grants available to female entrepreneurs, there are a few more resources that can help women get mentorship, assistance in creating business plans, and networking opportunities.

  1. Women’s Business Centers

There are many resources offered by SBA, including Women Business Centers, located nationwide. As a women entrepreneur, it can provide you with business counseling, training, and access to capital.

  1. National Women’s Business Council

The National Women’s Business Council fights for women entrepreneurs on Capitol Hill. It also offers webinars and roundtable discussions to further women’s business knowledge and skills required.

  1. National Association of Women Business Owners

The National Association of Women Business Owners (NAWBO) is a dues-based organization that ensures providing opportunities to women in networking and professional development.

  1. SBA 8(a) Business Development Program

The program is not designed as a loan and doesn’t necessarily aim at women’s small businesses. Rather it offers guidance for small businesses owned by socially and economically disadvantaged people or entities. However, the program is marketed among women’s business groups as well as minorities. To apply for an 8(a) status, you’ll want to go through the certification site. And once applied and accepted, you’ll reap a lot of benefits such as:

  • Eligibility to compete for government contracts
  • Business Expert Mentoring
  • Access specialist for business opportunity
  • Assistance with marketing and technology
  1. Office of Women’s Business Ownership

The Office of Women’s Business Ownership empowers women and enables them with advocacy, outreach, education, and support. It also offers business training and counseling, marketing opportunities, access to credit and capital and federal contracts.