4 Best Small Business Loans for Women? & Here’s How to Get One

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Women face a lot of unique issues when it comes to managing their own businesses, especially when it comes to financing. The amount of money applied as small business loans for women is considerably low when compared to that of men.

Therefore, it can be said that fewer women apply for loans in the first place. Since women already face challenges in opening and running a business and interacting with business partners and clients, acquiring a loan shouldn’t become another one.

After the Recession of 2008, there has been a tremendous amount of growth in the world of entrepreneurs and small businesses. In fact, most of these businesses are now owned by women. Studies show that more than 50% of businesses in America are run by women, while businesses run by men are on the decline each day.

Read on to find out how to apply for small business loans for women. But first, you must ask yourself a few questions. Before taking a loan, it is very important for you to understand exactly what you require to open or run your business. Consider these:

1. What kind of a business am I opening?


2. How much money do I require?

3. What is my business’ current financial condition?


4. Will I be able to pay back the loan and how long will it take?


5. Do I already have a loan that needs payment?


6. What is my credit score?

After you have noted down the answers to the above questions, it will become much easier for you to choose what kind of small business loan you need.

Types of Small Business Loans

1. Small Business Administration loan

Small Business Administration loans have special benefits for women and are secured by the government, which helps lenders as well as borrowers. Lenders are more likely to work with you as more than 70% of the money is secured and guaranteed by the government. Similarly, the terms and conditions of these loans are mostly favorable to borrowers.

There are several types of Small Business Administration loans. The first and the most basic one being the 7(a) loan plan. This is the most frequently used flexible loan. Here, the loan is provided for both business purchases, like machinery, raw materials, equipment, etc., and for infrastructural purposes, like buying land for expansion of business or for repairing a building that already exists.

Other Small Business Administration loan programs include Microloan, Real Estate loan, and Disaster loan. The Microloan program focuses on small amounts with a maximum of $50,000 meant for small business loans for women.

The Real Estate loan program provides loan for long-term investment in land, equipment, real estate, and other assets. This loan cannot be used for inventory purposes. The Disaster loan program, as the name suggests, is meant for restoring equipment or infrastructure that was destroyed during a declared disaster.

The only downside to the Small Business Administration program is that it needs a lot of paperwork and filing, which takes a lot of time, and hence the loan is processed later than other loan programs.

2. Online loan programs

This is the best in terms of small business loans for women who do not qualify for common bank loans. Online loans offer small loans between the time periods of 3 months to 18 months and there are special incentives for women where loan plans can range from 2 to 5 years.

The best part about online loans is that they can be processed between a very short span of time. After applying, the loan takes about 2 days to get processed and sometimes it gets processed on the same day of application. Some online loan programs offer a low rate and long term investment to people who have good credit, while others cater to people with lower credit and charge higher interest rates.

3. Business Line of Credit

Similar to that of a credit card, a Business Line of Credit is basically a certain amount of money that is loaned to you for a set duration of time. You can withdraw an amount of money out of the amount loaned to you and you just have to pay interest on that. Once you pay back the set amount of withdrawn money to the lender, your credit line comes back to its original amount.

This is perfect for lenders and borrowers who want to communicate directly in terms of fund transfer as there is no middleman required. It is basically a revenue that is cyclical in nature and provides you financial capital all throughout the term and even during off season, therefore making it a perfect choice as small business loans for women.
The Business Line of Credit can be useful for businesses that run on retail and services like food delivery, salons, and other industries that need financial flexibility.

4. Small Business Grants

Small business grants are especially suitable as small business loans for women because there are several agencies that offer female-specific grants and incentives, which are extremely reasonable and useful.

Federal grants are usually specific to certain industries. For example, some federal grants focus on the empowerment of women and their families and, therefore, provide grants to organizations and businesses, which delve into these two areas only. Some federal grants encourage businesses that contribute to the development of science and technology, while others focus on agricultural and rural services.

State-level grants specifically focus on child care and home care sectors, infrastructure that impacts the social community, technological and economic development, etc.
Women face a lot of challenges when it comes to owning and running a business. More than nine million people in the US work for women-run organizations and such organizations contribute $1.7 trillion to the US economy but that only constitutes 4% of the total business revenue and 8% of the paid workforce, which amounts to almost nothing.

The most important obstacle for women while entering the business industry is social differences, gender politics, and abuse. With that in mind, we hope that equal opportunities for acquiring small business loans for women can become a big stepping stone for them to become an equal part of the US economy as the men.