Latino woman and small business owner in her store, to luustrate the idea of small business loans for women
Monica Williams
By: monica_williams
Read in 29 minutes

Small Business Loans For Women 2022: Top 20 loans and grants

Small business loans for women have increased the number of females in the business environment. That’s why we’ve outlined below the financing options available to these female entrepreneurs so they can apply and capitalize on their businesses.

Table of Contents
1. Best small business loans for women
2. How to compare small business loans
3. How to get a small business loan for a woman
4. How can I use a small business loan for women
5. Small business grants for women
6. How to apply for woman-owned business grants
7. Other resources for women-owned businesses
8. Other financing options for women-owned business
9. The importance of women-owned businesses
10. Challenges women face in business financing
12. FAQs

Best Small Business Loans For Women

Small business loans for female minorities are an attractive option since it’s a convenient source to get cash quickly.

Online lenders’ main benefits are speed and application anywhere, anytime. The application and funding process is much simpler and quicker (it can take as little as 2 days!).

That’s why many consider that online lenders offer the best small business loans for women in the market.

Compared to other online lenders, Camino Financial has very lenient loan requirements.

You can apply for our business loans with ITIN or SSN. You can get up to $30,000 with fixed terms from 24 to 60 months and an annual interest rate of no more than 57%. Plus, you don’t need collateral.

Experience how Camino Financial is distinctly different from other online lenders. Apply for a loan today.

ProsCons
  • Some lenders offer bad credit score loans
  • Quick and easy application and funding

Apply for a business loan

Microloans For Women

Microloans are for businesses that need smaller amounts of money. Getting a microloan is generally more accessible than other business lending options.

With Camino Financial, these types of financing for a woman-owned business range from $5,000 to $30,000.

The annual interest will never be more than 36%, and you can repay them within 24 to 36 months.

ProsCons
  • Accessible to businesses needing smaller loan amounts
  • Suitable for informally run small businesses earning less than $500,000 in annual sales
  • Are not appropriate for significant investments
  • Your past credit history can disqualify you from some lenders

SBA Loans (government-backed small business loans for women)

The Small Business Administration (SBA) is a US government agency. It enables banks to offer low-rate and long-term loans to small businesses and entrepreneurs.

#DidYouKnow
The SBA also sponsors various business development programs. For example, the Women’s Business Centers (WBC). These centers help women start and grow their small businesses.

The SBA is not a direct lender. Instead, it guarantees up to 85% of the principal amount of the SBA loan programs offered by certified lenders.

The government guarantee explains why most banks charge less than 9% annual interest rates on SBA loans.

Businesswomen can receive up to $5 million in government-backed small business loans for women. They can use them for working capital, expansion, acquisition, or start-up.

The catch is that SBA loans have very stringent requirements. Plus, their minimum credit score requirement tends to be very high.

They are for established businesses with profitable tax returns.

#DidYouKnow
This agency also offers SBA grants for women

ProsCons
  • Sizeable loan amounts
  • Lowest rates in the financing market
  • Long-term repayment schedule
  • Not easily accessible to early-stage businesses recently earning a profit
  • The capability to repay debt relies heavily on reported tax returns
  • Typically requires collateral
  • Prolonged application and funding (over 60 days)
  • It requires a significant amount of documentation

Banks and Credit Unions

Small business loans for women are available through banks and credit unions. But unfortunately, they have stringent lending guidelines.

This prevents many women business owners from getting funding.

When choosing the right bank or credit union, compare:

  • terms
  • interest rates
  • minimum and maximum borrowing limits

Some may require applicants to have established businesses with a hefty annual revenue. Term loans are available at fixed and adjustable rates.

Depending on the lender, you can repay from 3 to 10 years to accommodate your budget.

Traditional lenders require a personal guarantee. So, if your business cannot repay the loan, you take personal responsibility.

ProsCons
  • Some have the lowest interest rates for business loans
  • The financial institutions have many branches scattered throughout
  • They provide in-person customer service
  • Approvals can take up to 4 weeks or more
  • On average, they only approve 13% of applications
  • They require applicants to have good credit
  • May require collateral to secure the loan

Personal Loans for Women

A personal loan can be a viable solution for businesses that need start-up funding to get their businesses off the ground. Its requirements are less strict than traditional business loans.

They are usually the most accessible types of financing to get approved for.

Startup Business Loans For Women

The startup business loans have been created for small female companies or underfunded business owners who need starting capital, equipment financing, inventory purchase, software acquisition, and finance marketing initiatives to promote their business, among other expenses.

With Camino Financial, this business financing ranges from $1,500 to $7,500.

These loans are typically for smaller amounts up to $7,500. They depend solely on an individual’s finances and credit history. So women don’t need to have established businesses.

ProsCons
  • Perfect for entrepreneurs just starting that already have a good credit standing

How to Compare Small Business Loans

It’s good to compare lender requirements to choose the best one. For example:

  • compare APRs
  • minimum credit score and revenue requirements
  • repayment periods
  • available loan amounts

Also, pay attention to consumer 4 or 5-star ratings.

Here are some guidelines to understand the terms you’ll compare:

  • APRs:  The rate includes all the fees the lender charges the borrower. Lenders charge rates based on how much risk they will assume to approve a loan.
  • Cost to borrow: The total interest and fees charged by a lender represent how much it costs to get a loan for a specific term.
  • Fees charged: Typical fees: origination, late, insufficient funds, prepayment penalty, payment processing, and service. Choose a lender with fewer fees.
  • Short or long-term loan: A shorter term in business loans means your monthly payment is higher, but you pay less interest because you pay off the loan quicker. You’ll pay more interest with a long-term loan because it takes longer to repay the loan.

Tips for Comparing Women’s Business Loans

The financing for a woman-owned business can be tough to get. But by taking the time to compare it, you can find the best option for your needs.

Here are a few tips to help you get started:

  • Know what you need the loan for. This will help you determine which type is best for you.
  • Compare interest rates and repayment terms. Make sure you understand the loan’s full cost before committing to anything.
  • Research the lender thoroughly. You want to ensure you’re working with a reputable lender with experience dealing with women-owned businesses.
  • Get advice from other women in business. They can offer valuable insights and recommendations.

How To Get a Small Business Loan For a Woman?

We all know that when it comes to financing, female entrepreneurs have it harder than our male peers.

Here are the steps to get one of the best minority small business loans for women.

  1. Decide on how much money you need to borrow and how you’ll use it
  2. Compare lender requirements
  3. Fill out the loan application to see if you prequalify
  4. Share the necessary documents with the lender. Like tax returns, business licenses, bank statements, photo ID, financial statements, etc.
  5. Get approved and sign the contract.
  6. Receive your capital!

If you’re ready to apply, don’t wait any longer!

Apply for a business loan

How Can I Use a Small Business Loan for Women?

A female business owner has many options for using their loan proceeds. You can use the proceeds for most business-related expenses. For example:

  • buy inventory
  • consolidate debt
  • launch a start-up business
  • hiring more staff
  • buying equipment to launch a new product or service
  • purchasing land for a future warehouse

Above all, women should use their business loans to get the best return on their investment.

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Small Business Grants For Women

There are grants only available to female entrepreneurs. Nonprofit organizations usually offer them.

Below we have listed 7 of these small business grants for women.

InnovateHER Challenge

The InnovateHER Challenge takes place yearly. It awards women entrepreneurs with three grants totaling $70,000.

This SBA-sponsored grant aims to help women-owned businesses develop innovative products and services that empower and influence the lives of families and women in the industry.

The SBA chooses at least 10 finalist applicants to participate in a national challenge.

The finalists will then pitch the ideas, products, or services. The top 3 winners will get grants for female business owners for $40,000, $20,000, and $10,000.

Amber Grant

The Amber Grant debuted in 1998. It honors Amber, a young female entrepreneur who perished before her vision became a reality.

Amber grant helps female entrepreneurs to fulfill their business dreams.

The program awards 12 female entrepreneurs $10,000 each, with one grant awarded each month. More so, it awards a $25,000 grant to one of the 12 winners at the end of every year.

Open Meadows Foundation

This grant can help start, boost, or expand women-owned businesses.

Open Meadows Foundation focuses on promoting racial/gender/economic justice. Specifically in projects steered by women.

The foundation grants a maximum of $2,000 to female-led activities that benefit girls and women.

Open Meadows Foundation mainly focuses on start-ups and small organizations. To qualify for this grant, your project needs to have a budget that does not exceed $75,000.

Cartier Women’s Initiative Award

The Cartier Women’s Initiative focuses on women business owners actively generating revenue. It’s exclusive to women entrepreneurs owning a business from 1-3 years,

Top finalists win up to $100,000, and other award winners receive $30,000. Besides, each finalist gets personal mentoring and business training. Plus, they get to attend network, entrepreneur, and coaching seminars.

Tory Burch Foundation

With the Tory Burch Foundation, women can present their businesses to influential leaders.

You can receive $5,000 for business education. Plus, a one-year fellowship to contact fellow women entrepreneurs.

The Tory Burch Foundation also offers workshops and networking opportunities to fellowship winners.

Girlboss Foundation Grant

Girlboss Foundation debuted in 2014. It has awarded over $110,000 in grants to female business owners in the music, design, arts, and fashion industries. There have been no updates since 2019, though.

It supports and empowers female entrepreneurs by awarding $15,000 grants.

Eileen Fisher Women-Owned Business Grant

Eileen Fisher Women-Owned Business Grant gave private grants each year to women-owned businesses. There have been no updates since 2019, though.

You must prove that your business is ready for growth. Also, it supports innovation, sustainability, and awareness of human rights.

How To Apply For Woman-Owned Business Grants

Are these small business grants for women-owned businesses suitable for you? Follow these steps:

  1. The process is not that difficult if you want to get a grant for your small business. It can be pretty lengthy, though.
  2. First, find a grant that appeals to you and fits your business.
  3. Go to their site and check their requirements.
  4. Make sure you meet them all, or your application will be in vain.
  5. Then, it’s just a matter of waiting.
  6. These foundations tend to take a lot of time to review all the applications.

If you didn’t get the grant, don’t worry. You can still apply for other types of financing for a woman-owned business, like loans.

Apply for business loan

Other Resources for Women-Owned Businesses

  • Women’s business centers aim to help women start and grow businesses and find solutions to common business-related obstacles. They provide business training, counseling, and federal contracts. They also help women find ways to get capital.
  • Federal contracting centers: You can register for SAM (System for Award Management) to contract for federal jobs and nonprofits to receive grants. SAM provides certification services, technology, and training to compete in the federal sector.
  • Federal contracting programs: Women can get federal contracts thanks to Women-Owned Small Businesses Contracting Programs.
  • Ascent online learning platform: Women entrepreneurs can grow their businesses through Ascent. This is a digital online tool that provides free online learning resources.
  • National Association of Women Business Owners: They address the concerns of female entrepreneurs.
  • National Women’s Business Council: In conjunction with the Office of the President, the SBA, and Congress, it addresses business issues and finds solutions. Women have access to mentor groups, alternative lending programs, and other resources.
  • Office of Women’s Business Ownership: This SBA organization helps underserved and excluded businesswomen. It offers training, marketing opportunities, assistance programs, and access to funding.
  • National Association for Female Executives: The Association promotes and supports women in executive positions. In addition, NAFE provides education, networking, and advocacy to help women “move into senior ranks.”
  • Women Impacting Public Policy: The nonpartisan organization works nationally for women-owned businesses. WIPP educates female entrepreneurs on tax, health care, and other topics on policy and legislative matters.

How to Become a Certified Woman-Owned Small Business (WOSB)

The WOSB certification helps women compete for government contracts.

According to the SBA:

“The federal government’s goal is to award at least 5% of all federal contracting dollars to women-owned small businesses each year.”

To get a WOSB certification, one or more women must own 51% of the business and be US citizens. You can get the certification through the SAM (System for Award Management) website.

Other Financing Options For Women-Owned Business

Do the previous grants and women-owned business loans not seem like a right fit? Here are some other financing options.

Bear in mind that the following business loans are not specific for women. Still, they are a fantastic alternative that can help you grow, thrive, and reach success.

Asset-based Line Of Credit

Often, small businesses cannot bridge the cash flow gap between when they pay their obligations and when their commercial customers pay them. This is a working capital funding gap.

A Line of Credit (LOC) is an option to fill this gap. The company’s assets work as collateral: the more assets you have, the larger the LOC you can get.

You can draw cash from your account and only pay interest on the outstanding balance.

You’ll also need to pay a periodic fee, typically lower than the interest rate, based on the undrawn balance of the LOC.

Typically, the borrowing limits range from $5,000 to a whopping $150,000.

The challenge of getting a LOC is the application process. It takes more than two months and demands a lot of a business owner’s attention.

ProsCons
  • Flexible repayment terms
  • Most suitable to fund working capital gaps
  • Long application process
  • Requires business assets to secure these small business loans for women

Merchant Cash Advance (MCA)

Merchant cash advances are a trendy type of small business loan. Why? They are easy to get, and these alternative lenders don’t usually consider your credit score.

Lenders give you an advance based on your credit card sales. So if you make a lot of credit/debit card sales, you’ll receive a lot of cash.

After, you pay with a percentage of each future credit card sale.

But here’s the catch: they are costly, and the APR can go up as high as 400%.

ProsCons
  • The application process is simple
  • You can receive the capital fairly quickly
  • Personal assets (e.g., home, car) won’t work as the collateral for the loan.
  • Loan qualification criteria are less strict compared to conventional banks
  • The interest rates in these small business loans for women are incredibly high. They can end up crippling your business
  • You may have to make daily payments
  • There is no set period to repay the MCA. It depends on how good your sales are (if you’re going through a low season, it will take longer to repay)
  • They can have a lot of fees

Equipment Financing

Equipment financing helps entrepreneurs buy business equipment.

Lenders offer to finance with an APR ranging from 8% to 25%.

#DidYouKnow
Equipment covers a broad term. It can range from baking ovens, coffee machines, and specialized production machinery.

The APR on these business loans depends on

  • the resale value of the equipment
  • your credit score
  • your business’ industry
ProsCons
  • Predictable monthly payments
  • Helps in boosting business credit
  • Relatively low APR
  • The equipment is the collateral
  • These small business loans for women offer quick access to cash
  • It requires a high credit score for good terms

Invoice Financing

There’s a cash shortfall when customers take over 30 days to pay an outstanding invoice.

One solution is applying for women-owned business loans. They offer an advance on outstanding invoices (80% to 90%).

The cost of invoice financing can get pretty expensive. The total invoice amount is between 1% to 3% a month.

You may need to ask your clients to pay the financing company instead of you, which could be disruptive.

ProsCons
  • Quick process
  • Accessible to early-stage or unprofitable businesses
  • It could be disruptive to client relationships
  • Expensive if used for over 30 days

Purchase Order Loans

Sales you acquire through a purchase order secure the small business loan. It’s like invoice financing.

When you receive products, the lender pays suppliers directly. That way, the manufacturer (you) can fill customer orders quickly.

Customers pay the lender directly. Then, the lender sends a payment to you, minus fees.

ProsCons
  • These small business loans for women are a helpful financial alternative for quick capital.
  • These businesses are often low on cash and can’t pay suppliers upfront.
  • If customers don’t pay the lender in a timely fashion, that means the lender won’t pay you.
  • Also, women business owners stay out of the loop, so they don’t have the chance to develop ongoing relationships with suppliers and customers.

Home Equity Loan

If you have a mortgage on your home, you’ve built up equity that you can borrow against.

As long as you have enough income and a good credit rating, most lenders have no problem offering this type of loan.

ProsCons
  • Lenders don’t require a business plan, copies of tax returns, or financial statements.
  • You make monthly payments on the small business loans for women, usually at a fixed rate and term.
  • The interest you pay annually toward repayment of the loan is generally tax-deductible.
  • Since your home is the collateral, you run the risk of foreclosure if you can’t make payments.

Nonprofit Loans

A nonprofit loan is ideal for women and other minority small business owners.

The funding comes from nonprofit lenders within the community.

A nonprofit loan offers economic aid to small business owners.

ProsCons
  • You can get capital for your business up to $50,000.
  • Lenders may also offer a secondary microloan if you need more cash.
  • Lenders may or may not require collateral to secure the loan.
  • If you don’t have a strong business plan or excellent credit, the lender may not approve small business loans for women.

Rollover For Business Startups

Imagine you’ve already put money away for retirement in a 401(k) and are in your 30s and 40s.

Pulling money out of your retirement fund (“rollover” the money) to start a new business is a viable option.

They can be good loans for female business owners. Although, they are not the best for someone about to retire.

ProsCons
  • You won’t pay an early withdrawal penalty if you transfer money directly to a business account.
  • Also, you don’t pay interest on a ROBS.
  • You could lose your retirement savings if your business fails.
  • The lender usually charges fees when transferring funds from your 401(k) to your business bank account.

Hard Money Loans

These business loans are a type of asset-based financing. A borrower receives funds secured by collateral in the form of real property.

This type of loan is suitable for someone who flips houses and doesn’t need long-term financing.

ProsCons
  • These small business loans for women are available to borrowers with a lower credit score.
  • Getting a hard money loan takes far less time than a loan from a traditional lender.
  • You may be able to get a better rate at a traditional bank if your credit score is excellent.
  • Interest rates on hard money loans usually are higher in the 10%-20% range.
  • Also, if you default on the loan, investors go after the collateral to sell the assets to recoup losses.

Equity financing

Equity financing is when a company raises money from investors for partial ownership of the company.

Commonly, this takes the form of selling shares (stocks) in a company.

The most obvious advantage of equity financing is that it can give companies access to the money they need to continue growing.

This is especially true of young companies who haven’t yet reached a point where they can be profitable and generate enough revenue from their products or services.

The Importance of Women-Owned Businesses

Women-owned businesses climbed 21% to a total of nearly 13 million, according to the American Express State of Women-Owned Businesses Report, between 2014 and 2019.

Employment grew by 8%, and revenue rose 21%. As of 2019, Hispanic-owned businesses made up to 18% of all women-owned businesses.

That’s why it’s essential to offer women-owned businesses the support they need to grow.

At Camino Financial, we love helping business owners. Even those neglected and ignored by other financial institutions.

That’s why we offer affordable women-owned business loans. Plus, we have minimum requirements and fixed payments.

So if you need capital to grow, Camino Financial is your best option.

Challenges Women Face In Business Financing

Women face a unique set of challenges when it comes to financing their businesses.

One of the biggest obstacles women face is the gender bias that exists in the venture capital industry.

Studies have shown that women-led startups are less likely to receive funding than those led by men.

We can attribute this bias to a variety of factors, including the fact that men run most VC firms and tend to invest in companies that are familiar to them.

Another challenge is the lack of available resources.

Although there are many programs and initiatives geared toward helping women-owned businesses, they are often underfunded and lack the reach of their male-focused counterparts.

Despite the challenges, many organizations and programs are working to support women entrepreneurs.

These resources can help women get the funding and support they need to succeed, from accelerators and incubators to mentorship programs.

Best and Worst-Paying Cities for Women

Gender pay and financing gaps discourage women from pursuing business financing. Why? Because it is harder to save money to start a business.

Likewise, many lenders consider them a greater financial risk with fewer earnings. 

Thus, women need to work in locations with better salaries to have more money to start a business.

Best-paying cities for women

In the following best-paying cities, women receive 89% to 97% of what men earn.

  • Santa Fe, NM
  • Jacksonville, NC
  • Napa, CA
  • Durham-Chapel Hill, NC
  • Manhattan, KS
  • Naples-Immokalee-Marco Island, FL
  • Cape Coral-Fort Myers, FL
  • Los Angeles-Long Beach, Anaheim, CA
  • Salinas, CA
  • New Bern, NC

Worst-paying cities for women

In these worst-paying US cities, women receive 59% to 67% of what men earn. 

  • Houma-Thibodaux, LA
  • Provo-Orem, Ut
  • Enid, OK
  • Lake Charles, LA
  • Lafayette, LA
  • Victoria, TX
  • Odessa, TX
  • Idaho Falls, ID
  • Wheeling, WV
  • Midland, Tx

*According to Business.org

Get The Financing Your Small Business Needs!

Access to finances is one of the significant challenges many people face. Especially women entrepreneurs.

Luckily there are solutions like Camino Financial. We provide speedy and convenient business financing to immigrants and minority business owners.

Our primary goal is to see small entrepreneurs rise and become giants in the business field. We can even approve your loan if you have less than perfect credit or no previous credit history.

We want to help you achieve success!

Apply for a business loan today

 

Learn more about business

Interest Rate Hike 2022: The New Average Business Loan Rates

How to Find Angel Investors: Learn From the Experts

Ultimate Guide on How to Start a Construction Company

 

FAQs

Is it easier for a woman to get a business loan?

Despite their entrepreneurial spirit and impact on the economy, women still struggle, especially when getting business loans.

Sometimes we even have a more challenging time than male business owners. But don’t let that stop you because when you do get the financing you need, your victory will taste even sweeter.

If you need a small business loan, applying with some female-friendly lenders is the easiest way to get it.

Can you get a business loan if you only have an ITIN?

Yes, you can! Getting an ITIN loan is possible. Many lenders out there will let you get a loan even if you don’t have an SSN.

What business grants exist for women entrepreneurs?

Here are the top small business grants for women:

  • InnovateHER Challenge Grant
  • Amber Grant
  • Open Meadows Foundation Grant
  • Cartier Women’s Initiative Award
  • Tory Burch Foundation Grant

Where can women get small business loans?

Women can apply for loans at local banks and credit unions. Also, through reputable online lenders.

Banks may have stricter eligibility requirements. But, business lenders may accept applicants with a bad or low credit score.

Some online lenders offer loans suitable for women turned down by other lenders.

Is it hard to get small business loans for women?

It can be challenging for women to access the financing they need. But if you partner with a lender willing to find a financial solution for your business, it shouldn’t be hard.

Many women choose to get smaller loans and make timely payments. This helps them qualify for a larger loan with better terms in the future.

Can I get small business loans for women with bad personal credit?

Online lenders are more willing to offer small business loans for women. That means applicants with bad credit (300 to 629) can get capital.

To approve you even if you had a bad score, lenders will review your:

  • revenue
  • years in business
  • outstanding debts
  • how profitable your business is

You might have to pay a higher interest rate and provide collateral.

How do female entrepreneurs get a loan?

Women can improve their chances of loan approval. Choose lenders that work with minority-owned business owners (like Camino Financial).

When should I get a small business loan for women?

You should get a loan when you need funds to start your company or strengthen your existing business.

But is it a good idea to get one? In most instances, it’s okay to get a loan when you habitually pay your bills on time and you can repay a loan comfortably.

Why do women-owned businesses get denied loans at such high rates?

In short, bias.

Historically, businesses owned by men have higher revenues than women-owned businesses. Also, men typically have higher credit scores compared to women.

Those two factors contribute to some lenders denying women a loan.

In an HSBC survey of 1,200 entrepreneurs, more than 33% of the women experienced gender bias. Females reported that investors asked more questions about their personal lives. Men said that questions focused on their business idea.

Are there SBA loans for women?

The Office of Women’s Business Ownership helps women entrepreneurs gain access to capital and credit.

The SBA sponsors 8(a) Business Development Programs to help disadvantaged businesses compete.

Additionally, women can apply for regular SBA loans such as 7(a), 504 loans, and microloans.

Are there business loans specifically for women?

No. The Equal Credit Opportunity makes it illegal for lenders to discriminate based on:

  • race
  • color
  • age
  • religion
  • national origin
  • marital status
  • gender

So there can’t be loans exclusively for women. Both men and women should have an equal playing field when applying for financing.

How do I qualify for small business loans for women?

Quick list of standard loan requirements:

  • Personal and business credit scores
  • Business stats: like time in business, annual revenue, and profit. Also, current receivables and payables, EIN, and type of business entity. They might come as for a list of collateral.
  • Documents: Two years of personal and business tax returns. Plus bank statements, financial statements, business licenses and permits, and business legal documents.
  • Business plan

Fortunately, some lenders, like Camino Financial, have minimal requirements.

How can a woman get money to start a business?

A woman can get money to start a business in a few different ways. One way is to apply for a small business loan from a bank or other lending institution.

Another way is to pitch her business idea to potential investors, such as angel investors or venture capitalists. A third option is to seek out government grants or funding programs that are specifically aimed at helping women entrepreneurs start businesses.

Finally, she could also try crowdfunding her business project on websites like Kickstarter or Indiegogo.

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