Latino woman and small business owner in her store, to luustrate the idea of small business loans for women
Monica Williams
By: monica_williams
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Top 20 Grants and Small Business Loans for Women

The entrepreneurial field is quite saturated, but women have stormed it with a bang, courtesy of small business loans for women. Also, there is a good number of small business grants for women.

According to the American Express latest State of Women-Owned Businesses Report, between 2014 and 2019, women-owned businesses climbed 21% to a total of nearly 13 million. Employment grew by 8% and revenue rose 21%. As of 2019, Latina/Hispanic women-owned businesses made up to 18% of all women-owned businesses.

Here are other relevant statistics about female entrepreneurship in the US:

Statistics about female entrepreneurs in the US, infographic. Camino Financial. concept: small business loans for women

Check out more revealing numbers and stats about women entrepreneurs in the US

These statistics help us understand the impact of women in business. However, most women own small and medium businesses that tend to concentrate on overall low-growth and low-profitability sectors. But these small businesses create a lot of jobs in the US economy.

How Can Women Get Small Business Loans?

To put it shortly: by fighting for what they deserve.

Maybe you’ve faced some obstacles in the past. We all know that, when it comes to financing, we, female entrepreneurs, have it harder than our male peers. But that doesn’t mean we should just give up.

The good news is there are financial institutions and business centers that focus on supporting women who aspire or currently are small business owners.

Here you’ll find our top choices for small business loans for women and small business grants for women.

Portrait of smiling pretty woman enjoying her work in design studio. concept: small business loans for women

20 Financing Options for Women-Owned Businesses

Outlined below are small business loans and grants that women can apply to start or boost their businesses. This write-up focuses on financing options designed with favorable terms to help women succeed in business and achieve the American Dream.

Loans for female business owners

1. Government guaranteed term loans

The Small Business Administration (SBA) is a US government agency that enables banks to offer low-rate and long-term loans to small businesses and entrepreneurs. The SBA also sponsors various business development programs, including the Women’s Business Centers (WBC), that help women start and grow their businesses.

Whether through a WBC or any SBA lender, women can access government-guaranteed loans at favorable terms to the market.

The SBA is not a direct lender. Instead, it guarantees up to 85% of the principal amount of the loans offered by certified lenders, according to one of the SBA’s loan programs. The government guarantee explains why most banks can charge less than 9% annual interest rates on their small business loans.

Women entrepreneurs can receive up to $5 million in financing for a wide range of business purposes, including working capital, expansion, acquisition, or starting up.

The catch is these loans are mostly given to people who have strong credit scores and run established businesses with profitable tax returns. Also, the banks funding SBA loans typically require a significant amount of collateral.

Pros Cons
  • 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)
  • A significant amount of documentation is required

Learn here if you qualify for a government business loan.

2. Online loans as an alternative to banks

A couple of decades ago, if you wanted a loan to buy equipment or fund your operations, you needed to find time in your schedule to visit your local bank branch to request it. Fortunately, the internet has made things easier and trouble-free. Today, there is a wide array of online lenders who provide alternative lending to small businesses.

Online lenders have become increasingly popular. Such is the case of Camino Financial, a company that offers small business loans ranging from $5,000 to $400,000. Unlike other term loans, theirs don’t require collateral, and your funds can be available in four to 10 business days after submitting an online application.

Pros Cons
  • The application process is simpler
  • No personal assets (e.g., home, car) is required to collateralize the loan
  • Loan qualification criteria are less strict compared to conventional banks
  • More businesses earning less than $1 million in sales
  • Quick funding. Typically within 10 business days.
  • The interest rates are higher than bank loans
  • Some lenders require to be paid weekly or daily

3. Asset-based line of credit

Often small businesses are not able to bridge the cash flow gap between when they pay their obligations and when their commercial customers pay them.

The difference between the days you need to pay your business bills and the days it takes your customers to pay is known as a working capital funding gap. A Line of Credit (LOC) is an option to fill this gap.

LOCs are, essentially, credit cards collateralized by a company’s assets. The more assets you have, the larger the LOC you can get.

Different from credit cards, a company can draw cash from their account and are charged interest on the outstanding balance. They also need to pay a periodic fee, typically lower than the interest rate, based on the undrawn balance of the LOC.

Unlike term loans, a business line of credit gives women business owners flexible repayment terms. Mostly, online lenders allow you to repay the balance in full to save on interest costs. Typically, the borrowing limits range from $5,000 to a whopping $150,000.

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

Pros Cons
  • Flexible repayment terms
  • Most suitable to fund working capital gaps
  • Long application process
  • Requires business assets to secure the LOC

4. Microloans

As their name suggests, microloans are business loans engineered towards supporting businesses earning less than $500,000 in annual sales. Hundreds of nonprofit organizations and online lenders offer microloans to qualified borrowers. The microloans range from $5,000 up to $75,000. 

The annual interest ranges from 20% to 32%, and they are tailored to be repaid within two to five years. This is to help entrepreneurs not to get locked down in debts.

Getting a microloan is generally more straightforward and quicker than getting a traditional bank loan. However, you will still be required to write a business plan.

Pros Cons
  • Accessible to businesses needing loan amounts between $5,000 and $50,000
  • Suitable for informally run businesses earning less than $500,000 in annual sales
  • It requires lengthy documentation
  • Your past credit history can disqualify you

5. Equipment financing

Equipment financing is tailored to help small entrepreneurs to buy business equipment. Equipment covers a broad term. It can range from baking ovens, coffee machines, and specialized machinery for production. Lenders offer to finance with the APR ranging from 8% to 25%. The APR depends on the resale value of the equipment, your credit score, and the industry you have ventured into. It’s a viable solution for startups.

Pros Cons
  • Predictable monthly payments
  • Helps in boosting business credit
  • Relatively low APR
  • Equipment is a strong collateral
  • Quick access to cash
  • It requires high credit scores for good terms

6. Invoice financing

In some industries (primarily B2B businesses), customers may take over 30 days to pay an outstanding invoice. This can create a cash shortfall if you need to make upfront cash investments to deliver a product or service to your customer.

One solution is receiving between 80% or 90% advance on outstanding invoices. The cost of invoice financing, or factoring, is between 1% to 3% a month on the total invoice amount, which can get pretty expensive depending on how long you need the financing.

Another consideration is you may need to ask your clients to pay the financing company, instead of sending you a check. Depending on how to manage your customer relationship, this may be disruptive to your business.

Learn here everything you need to know about factoring.

Pros Cons
  • Quick process
  • Accessible to early-stage or unprofitable businesses
  • Could be disruptive to client relationships
  • Expensive if used for over 30 days

7. Purchase order loans

Similar in nature to invoice financing, sales you acquire through a purchase order secure the loan. When you receive orders for products, the lender pays suppliers directly, so the manufacturer (you) can fill customer orders quickly. Once delivery is made, customers pay the lender directly. Then, the lender sends a payment to you minus fees.

Pros Cons
  • Purchase order loans are a helpful financial alternative for women-owned businesses that are newly-organized. 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 from the moment an order is made to the moment the client pays, so they don’t have the chance to develop ongoing relationships with suppliers and customers.

8. Personal loans

Women business owners need startup funding to get their businesses off the ground. Personal loans can be a viable solution since their requirements are less strict than those in traditional business loans. Personal loans are typically extended for smaller amounts up to $40,000 and are based solely on an individual’s personal finances and credit history.

Pros Cons
  • Perfect for entrepreneurs just starting that already have a good credit standing
  • Repayment terms are usually for less than five years. Interest rates vary widely, averaging between 6-36 percent.

At Camino Financial we specialize in small business loans, but we can also help you get a personal loan. If a traditional bank rejected your loan application, remember that Camino Financial has fewer requirements.

Our personal loans can go up to $40,000 and build your personal credit. The payment period varies from five to 40 months. Click here for more information. Keep in mind: the quick process allows you to get your funds in less than five business days!

9. 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.

Pros Cons
  • Lenders don’t require a business plan, copies of tax returns, or financial statements. You make monthly payments on the loan, 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 used as collateral for the loan, you run the risk of foreclosure if you can’t make payments.

10. Nonprofit loans

A nonprofit loan is ideal for women and other minority small business owners where funding comes from nonprofit lenders within the community. A nonprofit loan injects economic aid into a local community by providing capital to small business owners.

Pros Cons
  • You can acquire 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 the loan.

11. Rollover for business startups

If 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. Doing so is not recommended for someone about to retire.

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

12. Hard money loans

This is a type of asset-based financing through which a borrower receives funds secured by collateral in the form of real property. Private investors or corporations typically issue hard money loans. You can use the money to purchase equipment and other assets you need for your small business.

This type of loan is suitable for someone who flips houses (where the house to be flipped works as collateral) and doesn’t need long-term financing.

Pros Cons
  • Loans are available to borrowers with lower credit scores. 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 are normally 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.

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

Despite their entrepreneurial spirit and impact in the economy, women still struggle to finance their businesses. Sometimes we even have a harder 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, the easiest way to get it is by applying with some female-friendly lenders. I recommend you review the loans in this article to find the match for your small business.

Are you a woman entrepreneur? These tips will help you overcome your most common challenges

Grants for female business owners

All those above are some of the best small business loans for women entrepreneurs. Additionally, there are grants exclusively available to female entrepreneurs. Below we have listed eight of these small business grants for women.

13. InnovateHER Challenge

InnovateHER Logo. concept: small business loans for women

The InnovateHER Challenge is sponsored by SBA small business loans, takes place yearly, and awards three attractive grants to women entrepreneurs totaling $70,000. SBA awards aim to grant businesses that develop innovative products and services that empower and influence the lives of families and women in the industry.

Once the list of local winners gets submitted to the SBA, the SBA will be tasked to choose at least 10 finalists to participate at the National InnovateHER challenge. The finalists will then pitch the ideas, products, or services, and the winners will get $40,000, $20,000, and $10,000 grants, respectively.

14. Girlboss Foundation Grant

girlboss foundation logo. concept: small business loans for women

Girlboss Foundation debuted in 2014 and has awarded over $110,000 in grants to women entrepreneurs in music, design, arts, and fashion industries. The primary objective is to support and empower female entrepreneurs by awarding them grants that range between $500 to $15,000.

To get the grant, the applicants must be female and 18 years or older. The applicants should also demonstrate creativity, financial need, and business acumen.

15. Open Meadows Foundation

open meadows foundation logo. concept: small business loans for women

Women entrepreneurs have no reason not to start, boost, or expand their business. Open Meadows Foundation focuses explicitly on promoting racial/gender/economic justice in projects steered by women. The foundation grants a maximum of $3,000 to female-led activities that benefit girls and women.

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

16. Amber Grant

amber grant/women's net logo. concept: small business loans for women

The Amber Grant debuted in 1998 in honor of Amber, a young female who perished before her entrepreneurial vision became a reality. Amber grant was tailored to support female entrepreneurs to fulfill their business dreams. 

The program awards 12 female entrepreneurs $2,000 each, 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.

17. Eileen Fisher Women-Owned Business Grant

eileen fisher logo. concept: small business loans for women

Private grants are given each year to women-owned businesses. You must demonstrate that your business is ready for growth and supports innovation, sustainability, and awareness of human rights in the marketplace.

18. Cartier Women’s Initiative Award

cartier women's initiative logo. concept: small business loans for women

Exclusive to women entrepreneurs owning a business from 1-3 years, the Cartier Women’s Initiative Award focuses on business owners that are actively generating revenue. Top finalists win up to $100,000, and other award winners receive $30,000. Each finalist gets personal mentoring and attends network, entrepreneur, and coaching seminars.

19. Tory Burch Foundation

Tory burch Foundation logo. concept: small business loans for women

Women applicants get an opportunity to present their business to influential industry leaders. You can be awarded $5,000 to be used toward business education and a one-year fellowship to contact fellow women entrepreneurs. The Tory Burch Foundation also enables fellowship winners to attend workshops and network with business experts.

20. The Walmart Foundation

Walmart Foundation logo. concept: small business loans for women

Grants are available for sums between $250 to $250,000 for nonprofit organizations. The Walmart Foundation doesn’t discriminate on gender when offering funds but does indicate it supports women-led businesses.

How can a woman get a small business grant?

If you want to get a grant for your small business, the process is not that difficult, but it can be quite lengthy, though.

  1. First, find a grant that appeals to you and fits with your business.
  2. Go to their site and check their requirements. Make sure you meet them all, or your application will be in vain.
  3. Then, it’s just a matter of waiting. These foundations tend to take a lot of time reviewing all the applications.
  4. If you didn’t get the grant, don’t worry, you can still apply for one of the small business loans detailed above.

Asian woman working laptop. Business woman busy working on laptop computer at office. concept: small business loans for women

Get the Financing your Small Business Needs!

Access to finances is one of the significant challenges many small business owners face, especially women entrepreneurs. Luckily there are solutions like Camino Financial. We provide speedy and convenient small business loans to minority business owners. Our primary objective is to see small entrepreneurs rise and become giants in the business field.

Apply for a loan today to find a viable solution to strengthen your financial muscles!

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