The country's 12.3 million women business owners employ more than 4 million and add about $1.8 trillion to the U.S. economy. While the future looks bright for all women, women entrepreneurs face difficulties when it comes to small business loans and lines of credit. There is still an enormous gender gap in the small business loan distribution and how this inequality has justified the creation of specific options for women entrepreneurs.
Women also typically don’t ask for as much financing as men do. When lenders approve their financing, they usually receive $5,000 less than their male counterparts.
How We Choose the Best Small Business Loans for Women
With so many business loans available, choosing the best small business loan for women can be tricky and time-consuming. Luckily, our team of experts did the work for you. They reviewed the best practices for choosing a small business loan, and used the following factors to rank the lenders on this page.
- Application process: Identify lenders with transparent application processes. Find lenders that provide all the features of their lending process like rates, fees, and terms, with no surprises in the process.
- Qualification details: Know your personal credit scores, business credit scores, annual revenue, and other details so you can find loans that are best for your company. Know if you’ll be required to provide a personal guarantee to get funding.
- Variety of loan options: Business financing comes in many options like Small Business Administration loans, unsecured and secured business loans, lines of credit, startup loans, merchant cash advances, and more. Research to narrow down your preferred financing methods.
- Interest rates and fees: Compare multiple offers to find the best deal. If you need to use nontraditional financing, understand the cost of borrowing may be higher.
- Customer support: Determine the lender’s customer support options, like email, phone, chat or other methods. Know their hours of operation to determine if they’re available during the times you need them.
- Online user reviews: Use online review platforms like Trustpilot to research the lender’s customer service rankings (including average response time), their trustworthiness or transparency, and their customer support throughout the application and repayment processes.Look for patterns that show the strengths and weaknesses of lenders you’re considering.
How Do Women-Owned Businesses Apply for Loans?
Here are three steps to help you apply for a small business loan for women.
- Review eligibility requirements. Be sure to research a lender’s qualification criteria before completing an application. For example, some lenders might only accept applications from businesses that are majority or 51% or more woman-owned. With certain SBA loans, meanwhile, you might also need to be certified through the Small Business Administration as a Woman Owned Small Business (WOSB).
- Gather the necessary documentation. Most lenders want to see 2-3 years of of your personal and business tax returns, bank statements, business financials and documents, proper identification, business plan (for SBA loans), and more.
- Choose your preferred loan and apply. Once you’re sure you can qualify for and afford the financing you need, perhaps calculate the cost of borrowing. Interest rates and fees can vary widely among lenders. So, don’t be afraid to shop around.
Small Business Grants for Women
Access to capital through lenders is helpful, but you have to repay those funds. Grants offer the chance to grow your business without going into debt. The process may be time consuming, and the funds take much longer to get than from loan, but they don’t require a credit check to apply. However, business grants are taxable income to your business, unless the law states otherwise, and the granting organizations will send documentation to the IRS confirming you received the funds from them. Check to determine whether you must pay federal or state taxes on these grants.
The U.S. government, regions, and states offer grants for women-owned small businesses. To qualify, you must satisfy a number of requirements, like agreeing to collaborate with the federal government or another enterprise, having the correct number of employees (i.e., less than 500), and other qualifications depending on the grant source. For more details, on federally-funded grants, visit at Grants.gov and use the search feature to find grants for women. Also, visit Challenge.gov for opportunities to win cash prizes for competing in federal government agency-run creative, scientific and technical business challenges.
Small Business Development Centers (SBDC): Part of the Small Business Administration, SBDCs often are associated with local universities or a state’s economic development agency. Tasked with providing small businesses and entrepreneurs support, SBDCs can direct you to grant resources in your area.
State Trade Expansion Program (STEP): This SBA program provides funds to state governments to help small businesses expand internationally. Grant opportunities vary by state but can offer grant funds for multiple global marketing activities.
Also search for Women’s Business Development Centers online, which most states have, and for “small business grants” and your state name. States like California, Florida, New York, and Texas offer multiple small business grant programs, but they’re available in other states, too.
Corporate and Foundation Grants
Like state and local grants, corporate and foundation grants abound. Here are several sources of these grants.
Cartier Women's Initiative Grants
The Cartier Women's Initiative is an international entrepreneurship program that promotes change by empowering women entrepreneurs. The program offers seven regional grants with a top grant award of $100,000 for seven laureates and $30,000 for 14 finalists. It aims to fund strong, sustainable social and environmental impact.
The Amber Grant is a private foundation that awards a grant of $10,000 or more every month. The foundation awards an extra $25,000 grant to one of the 12 winners at the end of the year.
To apply you must:
- Pay a $15 application fee.
- Disclose the name and nature of your business.
- Share what you plan to do with the grant.
To recognize the diversity of women-owned businesses, the organization expanded its grant-giving to include “Marketing Grants” and “Business Category Grants.” Their site also provides resources for finding other grants.
The Girlboss Foundation Grant
The Girlboss Foundation offers two $15,000 grants to women business owners. Grants are available for women entrepreneurs involved in the following creative fields:
To be eligible for a grant, you must demonstrate that you have an innovative and creative woman-owned business with financial need.
FedEx Small Business Grant
FedEx offers grants to small businesses within the United States that meet the following criteria:
- Active businesses with a FedEx shipping account and a shipping need
- No more than 99 employees.
- At least six months in business
The 2021 grant contest offered a first-place award of $50,000, a second-place award of $30,000, and third-place awards of $15,000. Winners also get a credit to use on FedEx Office print services.
The Comcast RISE Small Business Program is a contest that eligible women-owned business owners enter to win grants. In March of 2021, 500 businesses won a combined $5 million in grants, and another $6 million was awarded that November.
Eligible grant recipients may use funds for:
- Media consultation and campaigns
- Technology upgrades
To apply, complete an online application and optional video to explain why your business should be considered.
Additional Resources and Organizations for Women Business Owners
In addition to online lenders and grants, here are some other sources of loan funds to consider.
Local Banks and Credit Unions
Many lenders have moved online, but if you prefer a face-to-face connection, local community banks and credit unions might be better fit you.
If you need funding to purchase or lease equipment, the seller or manufacturer might offer financing options to help you cover the cost of your purchase. Keep in mind the equipment usually acts as the collateral for the loan.
Investors and Venture Capitalists
If you have a business or idea with the potential to scale, you might consider taking on investors or venture capitalists. However, be prepared to share some equity in your business, and to invite input from your new business partners in the future. Women also face obstacles here. They received just 2.3% of venture capital funding in 2020.
Crowdfunding is a bit like GoFundMe, except for business. You can use a number of online platforms to raise money for your business, with a series of small donations or equity-based investments. So, know whether participants in your crowdfunding campaigns are giving outright donations or require something in return for their funds. Also carefully review the rules for using their platforms to avoid challenges to your fundraising campaigns.
If you’re looking for choices besides debt financing, consider these grants and small business loans for women. You won’t get funded as fast and may have to compete with others to get financed this way, but if you have time to wait and really want to avoid debt, this may be the way to go.
Analyzing and thoroughly reviewing financial services loans is considerable work, but our team of financial experts that is made up of Accounting and Finance Professors, Doctors of Business Administration (DBA), Certified Financial Education Instructors (CFEI), Chartered Financial Analysts (CFA) and a Certified Public Accountants (CPA), Award-Winning Business and Personal Finance Journalists is more than up for the task.
To find the best small business loans for women, we compared loan options and lenders to find companies with excellent ratings and user reviews on websites like Trustpilot. We also looked for lenders who offer high loan amounts and flexible repayment options, as well as the ability to apply and set up loan funding online.