Best Small Business Loans for Women
82% of women-owned businesses were at least partially approved for financing in 2024 — 3% more than businesses primarily owned by men.
Financing options for women entrepreneurs
How does gender affect small business loans?
Even though over 39% of businesses in the U.S. are owned by women, and the Equal Credit Opportunity Act makes it illegal for lenders to discriminate against borrowers based on sex, many women still experience real challenges in accessing capital for their businesses.
Historically, studies have shown that businesses primarily owned by women were less likely to receive investments or be fully approved for small business financing. However, a 2024 survey by the Federal Reserve revealed that only 18% of women-owned businesses were denied financing — a slightly lower percentage than businesses owned by men.
Still, women entrepreneurs expressed concerns around their ability to qualify for small business loans. Of those that chose not to apply for financing, 12% of women business owners said it was because they didn’t think they would be approved. This belief was higher among women than men.
Interestingly, the same amount of men- and women-owned businesses reported that they were in poor financial condition at the time of the survey, so there’s no definitive reason why women entrepreneurs would believe their chances of denial to be higher. That said, it’s likely due to unconscious biases that still exist in the lending space.
While progress is being made, it’s clear more needs to be done to close the gender gap. Working with a lender that focuses on supporting women-owned businesses can help women entrepreneurs claim what they deserve in the business world.
Types of small business loans for women
Many lenders are committed to providing the same resources and funding opportunities for businesses regardless of gender. Online lenders tend to have more lenient requirements and faster funding times than traditional bank loans, though they often charge higher rates and fees.
Here are some common types of business loans to consider for your business:
Term loans
Term loans provide a lump sum of cash, which is repaid over time through fixed payments of both principal and interest. Short-term loans typically need to be repaid in three to 24 months, while long-term loans may give you up to 25 years to repay the debt.
Short-term loans can be helpful for covering immediate business needs, but they often require daily or weekly payments, which can put a strain on your business cash flow. If you need to make a larger investment, a long-term loan could be a better fit.
Business lines of credit
A business line of credit allows business owners to borrow funds as needed up to a set amount. You typically only pay interest on the funds you withdraw, though some lenders charge additional draw or maintenance fees, which can increase the cost of borrowing. Once you’ve paid down your balance, you can generally withdraw up to your credit limit again.
If you think your business could benefit from access to funding on an ongoing basis, a line of credit might be a better option than a term loan.
Working capital loans
A working capital loan is a short-term loan designed to finance a business’s day-to-day expenses, such as payroll, rent, utilities, supplies and more. The term and repayment structure will depend on your lender and your loan type, with some requiring daily or weekly payments.
Equipment loans
Equipment financing helps businesses purchase essential equipment like vehicles and machinery, with the equipment often acting as collateral. Some equipment lenders offer financing to cover the full cost of equipment plus related expenses like installation and shipping.
You can also consider equipment leasing if you need to replace equipment often. Some leasing programs give you the option of purchasing the equipment at the end of the term. Just keep in mind that leasing equipment tends to cost more in the long run.
SBA loans
Backed by the U.S. Small Business Administration (SBA), SBA loans offer favorable interest rates and lengthy repayment terms. Though not specifically reserved for women, these loans are well suited for small business owners who fail to qualify for traditional financing.
While the SBA oversees its loan programs, you must apply directly with an SBA-approved lender. It can often take between 30 to 90 days to receive an SBA loan, so this isn’t an ideal option for businesses with urgent funding needs. However, finding an SBA-preferred lender can reduce the timeline to about two weeks.
In addition to business loans, the U.S. Small Business Administration (SBA) supports women entrepreneurs by setting aside certain government contracts, which are only available for businesses that participate in the Women-Owned Small Business (WOSB) Federal Contract program.
To be eligible for these federal contracts, you’ll need to get certified as a WOSB, which you can do for free on the SBA website.
You can also obtain your certification through one of these SBA-approved third-parties, though each organization may have different fees and requirements:
Once you’re certified, you can bid on set-aside contracts through the System for Award Management. Keep in mind that your certification will need to be renewed annually.
How to get a loan for women-owned businesses
If you’ve decided to move forward with business financing, here are some key steps to take when applying for a business loan.
1. Decide how much money you need
Whether your goal is to start, maintain or expand a business, begin by making a list of what you need. For example, if your business is new, you may be looking to cover startup costs like licenses, permits and equipment. You can use this list to add up how much you’ll realistically need to achieve your goals.
Once you know how much you’re looking to borrow, use a loan calculator to estimate your monthly payments and total loan costs. Check your business budget to make sure the payments don’t exceed what you can afford. If you have any doubts about your ability to repay the loan, consider if a smaller loan amount could be enough to get you by for now.
2. Check your personal and business credit scores
Lenders typically consider both your personal and business credit scores to determine your ability to handle debt. If you have yet to build your business credit, lenders may put even more emphasis on your personal FICO Score to assess your level of creditworthiness.
You can monitor your credit score for free with LendingTree Spring to see where you stand. Keep in mind that while some online lenders are willing to work with borrowers with low credit scores, they usually charge high interest rates.
3. Research and compare lenders
Shopping around is essential if you want to find the best deal for your business. You can start by working with a marketplace like LendingTree. With one simple form, we’ll search our network of more than 30 business lenders to find potential matches for your business.
You can also read small business lender reviews and make a list of potential lenders that fit your company’s criteria. If there are any social factors that you plan to consider — like if you prefer to borrow from a nonprofit or a women-owned business — that information is generally available on the lender’s website. Remember that comparing quotes from multiple lenders can allow you to find the best deal.
It’s worth contacting your current financial institution to see if they offer small business financing. Having an established relationship with a bank or credit union can often strengthen your business loan application. Plus, keeping all your business accounts at one bank can make it easier to manage your accounting.
Here are some leading banks for small businesses:
4. Gather required documents
While business loan requirements vary between lenders, here are some of the documents you may need to include with your application:
- Personal and business tax returns
- Personal and business bank statements
- Copies of business licenses and registrations
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Financial statements, including:
- Income statements
- Balance sheets
- Business plan
- Certificate of good standing
- Details on collateral, if applicable
You can usually generate the financial statements you need in your business accounting software, while tax returns can be downloaded from your tax software.
5. Apply and review
Most lenders allow you to apply online, though some traditional banks and credit unions might require a phone call or in-person visit. Before you commit to a loan, read the business loan agreement carefully to make sure you understand all the terms, rates and fees.
How to compare business loans for women
Not all loans are created equal. It’s worth comparing the following factors to find the best business loan for your company.
Interest rate
Business loan interest rates vary by lender and loan type and are typically based on your credit profile. Some types of financing come with fixed rates, while others are variable. Some lenders list the annual percentage rate (APR) publicly, while others use simple interest rates or factor rates.
Additional fees
Keep an eye out for extra charges like origination fees, late fees or prepayment penalties, all of which can increase the total cost of the loan.
Repayment term
Loan repayment terms can range from a few months to several years, and payments may be required daily, weekly or monthly, depending on the lender. Make sure your business budget can handle the repayment schedule.
Time to funding
A quick business loan can provide funds in as little as a few hours, but these loans tend to come with higher rates and less flexible terms. Traditional lenders can take up to two weeks or longer to approve and fund your loan, but they generally offer more competitive rates and terms.
Collateral requirements
Some lenders offer secured business loans, which require collateral to reduce lender risk. Collateral can be anything of value the lender can seize if you fail to repay the debt, such as real estate, inventory, equipment, money owed to your business or other assets.
Women’s small business grants
Provided by government agencies, corporations and nonprofit organizations, small business grants can help women-owned businesses access funds that don’t need to be repaid.
Grants can be highly competitive and usually involve a detailed, lengthy application process, but they can be worthwhile if you have time to wait for funding.
Here are a few popular small business grants for women. You can also explore grant programs on Grants.gov.
1. Amber Grant
WomensNet awards three $10,000 grants to women-owned businesses every month, including the Amber Grant, Startup Grant and Business Category Grant. All recipients are entered to win additional funding through one of the three $50,000 Annual Amber Grants.
2. The Cartier Women’s Initiative
Every year, The Cartier Women’s Initiative (CWI) awards three grants to women-owned businesses across nine regions. First place gets $100,000, second place gets $60,000 and third place gets $30,000. Awardees are also eligible to participate in a fellowship program, which provides one-on-one training and community workshops.
3. HerRise Microgrant
The HerRise Microgrant awards monthly $1,000 grants to businesses that are primarily owned by women and generate less than $1 million in gross revenue. HerSuiteSpot also offers business planning and networking opportunities.
4. EmpowHer Grants
EmpowHer Grants provide early-stage funding for women-owned businesses. Applicants can receive grants up to $25,000, which are awarded as a reimbursement for business-related expenses. Recipients will also gain access to financial, marketing and industry experts who they can turn to for coaching and mentorship.
- Association of Women’s Business Centers (AWBC)
- Office of Women’s Business Ownership
- National Women’s Business Council
- National Association of Women Business Owners (NAWBO)
- National Association of Women in Construction
- U.S. Women’s Chamber of Commerce (USWCC)
- Women’s Business Enterprise National Council (WBENC)
- Women Impacting Public Policy (WIPP)
- Women Presidents Organization (WPO)
Alternatives to business loans for women
Small business loans are just one way to pay for your business expenses. If you aren’t able to qualify for a loan with competitive rates and terms, you could consider one of these alternatives.
Accounts receivable factoring
Accounts receivable financing, or invoice factoring, involves selling your unpaid invoices to receive a cash advance. The factoring company then collects payments from your customers, charging a fee before sending you the remaining amount.
While this type of funding can be more expensive than a traditional business loan, it could be an ideal option for women with bad credit, as eligibility is primarily based on your invoice history and the creditworthiness of your customers.
Merchant cash advances
A merchant cash advance (MCA) provides a lump sum of cash, which is repaid through a percentage of your business’s future debit and credit card sales. The lender takes a small percentage of transactions each day until the borrower pays off the loan.
MCAs can be easier to qualify for than traditional business loans, making this a viable option for women with less-than-perfect credit. However, this can be a costly way to borrow.
Business credit cards
Business credit cards can help you cover everyday expenses, such as travel and meals. Similar to a line of credit, you can use it when you need it, only paying interest on what you use.
That said, interest rates tend to run high and compound daily if you carry a balance, so it’s a good idea to pay off your full balance each month to avoid high interest charges.
Crowdfunding
Crowdfunding allows you to collect donations from friends, family and the general public via an online platform. In most cases, you won’t need to repay the money your business raises through crowdfunding.
However, you may need to offer some kind of perk to encourage donations, such as a free product or equity in the business. Also, most crowdfunding platforms charge fees, which can cut into your raised funds.
Frequently asked questions
If you are a startup with no money, you’ll likely have to implement several methods to get your business idea off the ground. You could approach family and friends to ask for donations, or launch a crowdfunding campaign to collect money from a wider audience. Additionally, there are some grants for women to start a business.
Depending on how lucrative your business model seems, you might have luck getting equity financing via a venture capitalist firm. And if you’re still juggling a full-time job, you can set aside some of your earnings to bootstrap your startup with your own funds.
You can also explore startup business loans for women, although most lenders prefer startups to have at least six months under their belt.
Despite there being approximately 14 million women-owned businesses in the U.S. today, female entrepreneurs continue to face gender inequality when it comes to small business financing.
Lenders can’t legally discriminate against female business owners, but studies have shown that women typically receive less funding than their male colleagues. For example, the average loan amount for women-owned businesses in 2024 was $67,035, compared to an average loan size of $80,140 for men-owned businesses.
That said, many lenders are focusing on supporting female business leaders by providing additional resources and business coaching classes. By connecting with a women-centered lender, your women-owned business can get a head start with financing.
If you work on government contracts, it could be worth taking the steps to get certified as a women-owned business. Doing so could make you eligible for government “set asides,” which are contracts the government reserves for small businesses like women-owned companies.
You can get your women-owned small business (WOSB) certification for free by applying directly through the U.S. Small Business Administration (SBA). You must have an active registration in the System for Award Management, as well as all required documents on hand.
You can also obtain your WOSB certification through the following third-party organizations. Each organization has specific requirements and fees.
Our methodology: How we chose the best business loans for women
We reviewed more than 20 small business lenders to determine the overall best business loans for women. To make our list, lenders had to meet the following criteria:
- Eligibility requirements: To include financing options for a variety of women-owned businesses, we included lenders with a wide range of credit score, time in business and annual revenue requirements, focusing on the best lenders for specific situations.
- Rates and terms: We looked for transparent lenders that disclose their interest rate ranges with no hidden fees, as well as those without prepayment penalties.
- Repayment experience: We favored lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers.
- Additional resources for women: We prioritized lenders that offer additional programs, resources and support for women-owned businesses, such as providing free educational classes or discussing the gender inequality gap in business on blogs or podcasts.