Best Small Business Loans for Women of 2021

Best Small Business Loans for Women of 2021

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Getting a small business loan is no easy task and it can be even more difficult for small business owners who are women. Female entrepreneurs are more likely to be in debt, be identified as a medium or high credit risk, and report financial struggles in the last 12 months than their male counterparts. We’ve provided a list of the best small business loans for women and grants for female business owners so you can decide which ones are right for your business. The lenders on our list are researched and evaluated based on factors like interest rates, time-to-funding and borrower requirements.

Table of Contents

Best small business loans for women

We chose the lenders in the table below based on their time-to-funding, flexible borrower requirements, interest rates and repayment terms. The best lenders offer a solid mix of favorable rates and terms, loan options and quick funding. In some cases, top lenders may have longer funding times but offer excellent rates and terms that balance out slower loan-disbursement times.

Best for

Lender

Highlight

Borrowers with bad credit

Credibly

  • Minimum credit score of 500 and 6 months in business
  • Offering up to $400,000 for working capital loans, over six to 24 months with factor rates starting at 1.15

Startups

SBA Community Advantage Loan

  • Backed by the SBA, lower eligibility requirements, and designated for underserved markets
  • Loan amounts up to $250,000, up to 25 years for repayment with an interest rate of prime rate plus 6%

Unsecured loans

Fundbox

  • Funds in your account as soon as next business day
  • Funding offered up to $150,000 at interest rates of 8.33% - 18.00%

Equipment financing

Better Business Funding

  • Lenient application requirements and large loan amounts for most equipment you’d likely need
  • Loan amounts up to $500,000, to be paid off over 24 to 72 months with interest rates starting at 5.9%

Commercial real estate loans

SBA 504/CDC loans

  • Backed by the government and some of the lowest interest rates you’ll find
  • Up to $5.5 million with repayment over 10, 20 or 25 years and interest rates from 2.25% to 2.54% depending on term

Borrowers with good credit

OnDeck

  • They look beyond the credit score of the business owner
  • Between $5,000 - $250,000 with terms up to 18 months and rates starting at 35% APR

Business line of credit

Wells Fargo

  • No collateral needed for this line of credit and potential low interest depending on your qualifications
  • Between $5,000 - $100,000 revolving line of credit for five years with interest rates starting at Prime plus 1.75 to 9.75%

Invoice factoring

BlueVine

  • Great for getting your invoices paid without the headache of tracking down customers
  • Up to 90% of your invoices depending on the specifics the loam terms depend on the invoices and interest rates starts at 0.25%

Best for borrowers with bad credit

Credibly

  • Minimum credit score of 500 and 6 months in business
  • Offering up to $400,000 for working capital loans, over six to 24 months with factor rates starting at 1.15

Best for startups

SBA Community Advantage Loan

  • Backed by the SBA, lower eligibility requirements, and designated for underserved markets
  • Loan amounts up to $250,000, up to 25 years for repayment with an interest rate of prime rate plus 6%

Best for unsecured loans

Fundbox

  • Funds in your account as soon as next business day
  • Funding offered up to $150,000 at interest rates of 8.33% - 18.00%

Best for equipment financing

Better Business Funding

  • Lenient application requirements and large loan amounts for most equipment you’d likely need
  • Loan amounts up to $500,000, to be paid off over 24 to 72 months with interest rates starting at 5.9%

Best for commercial real estate loans

SBA 504/CDC loans

  • Backed by the government and some of the lowest interest rates you’ll find
  • Up to $5.5 million with repayment over 10, 20 or 25 years and interest rates from 2.25% to 2.54% depending on term

Best for borrowers with good credit

OnDeck

  • They look beyond the credit score of the business owner
  • Between $5,000 - $250,000 with terms up to 18 months and rates starting at 35% APR

Best for business line of credit

Wells Fargo

  • No collateral needed for this line of credit and potential low interest depending on your qualifications
  • Between $5,000 - $100,000 revolving line of credit for five years with interest rates starting at Prime plus 1.75 to 9.75%

Best for invoice factoring

BlueVine

  • Great for getting your invoices paid without the headache of tracking down customers
  • Up to 90% of your invoices depending on the specifics the loam terms depend on the invoices and interest rates starts at 0.25%

Best for borrowers with bad credit: Credibly

Credibly’s working capital loan comes in our top spot for business loans for women with bad credit. They’re an online lender offering multiple types of financing including working capital loans, long-term business loans and business lines of credit.

The pros of Credibly are that they can offer anywhere from $5,000 - $400,000 in funding depending on the business and those funds could be available the same day your application is approved. The required minimum credit score is just 500 and Credibly requires at least $15,000 in monthly revenue.

A con of seeking funding with Credibly is that their funding is not available to startups. You’ll need a minimum of six months in business to be approved for financing from Credibly.

  • Loan amounts: $5,000 - $400,000
  • Loan terms: Six to 24 months
  • Factor rate: Starting at 1.15
  • Fees: 2.5% origination fee
  • Funding time: As soon as the day you’re approved

Best for startups: SBA

One of the best funding options for female-owned startups is the Small Business Administration (SBA) Community Advantage loan. This loan is backed by the SBA and the maximum loan amount is $250,000.

The biggest advantages of this loan are that it’s backed by the SBA and the interest rates are fairly low at the prime rate plus 6%. The SBA backs 85% of loan amounts up to $150,000 and 75% of loan amounts above $150,000. Plus, these loans are designated for underserved markets, making them available to business owners who might not qualify for traditional funding.

Some cons of the SBA Community Advantage loan are the annual service fee and one-time guarantee fee you’ll pay. Additionally, borrowers might need to offer some form of collateral for loans over $25,000.

  • Loan amounts: Up to $250,000
  • Loan terms: Potential collateral required, up to 25 years repayment
  • Interest rate: Prime rate plus 6%
  • Fees: One-time guarantee fee, annual service fee
  • Funding time: Five to 10 days

Best for unsecured loans: Fundbox

For an unsecured loan, the Fundbox term loan is a great small business loan for women. The loan’s fees are minimal: there’s no origination fee, prepayment penalty or application fee.

Fundbox offers term loans with a maximum amount of $150,000 with interest rates starting at 8.33% for a 24-week term loan and 18% for a 52-week term loan. Fundbox also offers a line of credit funding option on either a 12-week or 24-week term for up to $150,000. You’ll need at least six months in business and a minimum credit score of 600 but if you can meet those requirements Fundbox is a good option for you

  • Loan amounts: Up to $150,000
  • Loan terms: 24 or 52 weeks
  • Interest rate: Starting at 8.33% for a 24-week term loan, 18% for a 52-week term loan
  • Fees: No origination fee, no prepayment fee
  • Funding time: As soon as next business day after approval

Best for equipment financing: Better Business Funding

Equipment financing with Better Business Funding is a great option for business owners looking to make a large equipment purchase without shelling out the full purchase price. Usually, the piece of equipment acts as collateral so you don’t have to give a personal guarantee.

One major pro of Better Business Funding is that you can get up to $150,000 in financing by filling out a one-page application. Plus, they say they’re open to businesses with A, B and C credit ratings, so if you have a minimum credit score of 575 you could still be approved. They’ll also let you use your funding for new or used equipment.

For loan amounts over $150,000, you’ll need to fill out a more in-depth application. Another con to note is that while Better Business Funding can offer quick financing, their equipment financing rate might be a bit higher than a rate from a traditional bank.

  • Loan amounts: Up to $500,000
  • Loan terms: 24 to 72 months
  • Interest rate: Starting at 5.9%
  • Fees: No origination fee, average documentation fee of $250
  • Funding time: Two days

Best for commercial real estate: SBA 504/CDC loan

When it comes to buying commercial real estate, one of your best funding options will be an SBA 504/CDC loan. They’re designed to be used to purchase fixed assets, like land or a building, and they’re backed by the SBA.

A major pro of these loans is that they’re partially backed by Certified Development Companies, or CDCs. CDCs are community based partners of the SBA that are certified and regulated by the SBA. They come with some of the best interest rates on the market and fairly long repayment terms.

Some cons though are that your business has to have some specific traits to qualify for these loans. For instance, your business needs to be of a certain size, be able to prove a need for the loan and the money must be for an approved use.

  • Loan amounts: Up to $5.5 million
  • Loan terms: 10, 20 or 25 years
  • Interest rate: All of the interest rates are net effective 2.25% to 2.54% depending on the loan term
  • Fees: Up to 11 different fees for lenders and borrowers. Contact your lender directly to inquire.
  • Funding time: 60 days on average

Best for borrowers with good credit: OnDeck

If you’ve got good credit OnDeck, an online lender that’s lent billions to small businesses over the years, could be a solid option for a short-term loan.

The loan’s main advantage is that OnDeck looks at your business as a whole to make a decision on your loan application; it doesn’t limit its decision to your credit score and revenue. Also, OnDeck reports your loan payments to the three national credit bureaus, which can help improve your credit score. This can also be great for businesses with only a year of operation time but strong cash flow.

A con for any borrower is that OnDeck secures their loans by placing a lien on your business assets. Not all lenders will do this, so if you aren’t comfortable with it, OnDeck might not be the best option for you. In general, OnDeck looks for a minimum credit score of at least 600, a year in business and $100,000 in annual revenue.

  • Loan amounts: $5,000 - $250,000
  • Loan terms: Up to 18
  • Interest rate: Starting at 35% APR
  • Fees: Origination fee that ranges from 0% to 4%, depending on how many OnDeck loans you’ve borrowed
  • Funding time: As soon as same day for some loans in some states

Best for business line of credit: Wells Fargo

Wells Fargo’s BusinessLine line of credit offers loan amounts of $5,000 to $5,000. This line of credit has rates as low as prime plus 1.75% and does not require any collateral.

If you already use Wells Fargo for business financing, this could be a great option for you. Plus the fact that you don’t need collateral is another huge pro for women-owned small businesses looking for funding.

However, Wells Fargo may not be the best option for female-led startups because it looks for two years of business history, which is longer than some newer businesses might have.

  • Loan amounts: $5,000 - $100,000
  • Loan terms: Revolving line of credit for five years
  • Interest rate: Starts at Prime Rate + 1.75% to 9.75%
  • Fees: $95 to $175 annual fee depending on the loan amount, 3% ATM fee for certain transactions
  • Funding time: Not provided

Best for invoice factoring: BlueVine

If you’re looking for invoice factoring, BlueVine may be a good option. Women business owners can sell their unpaid invoices to BlueVine, who then charges a fee to advance the money. This is a major pro because you’re eligible to receive 85% to 90% of your invoices’ value without having to wait for the invoice to come in. Plus, BlueVine will provide invoice factoring for businesses with only three months in operation which is a crucial time for new businesses.

One major con of invoice factoring with BlueVine is that you’ll likely have to offer some type of personal guarantee to secure funding. Also, if your customers don’t end up paying their invoices, you’re on the hook.

  • Loan amounts: Roughly 85% to 90% of your invoices total
  • Loan terms: Depends on the invoices
  • Interest rate: Rates starts at 0.25%
  • Fees: No fee for ending your factoring
  • Funding time: 1 to 3 days after application

Small business grants for women

In some cases, grants for female business owners might be a better option than small business loans for women. Grants don’t typically need to be paid back and they can come from public or private institutions.

Not having to repay grants is a huge benefit. One of the cons, though, is that women-owned business grants are in high demand. There’s a lot of competition for any type of business grant out there making it difficult funding to secure.

Here are some grants for female business owners to explore if they’re looking for funding:

  • Amber Grant: This grant is for female business owners in remembrance of Amber Wigdahl and the application requires that you avoid corporate jargon and share your passion for your business in your own words. The organization awards one $10,000 grant a month and, at the end of the year, one of those 12 winners is awarded a grant of $25,000. Grant winners are announced on the 22nd of each month. You can apply online and will have to pay a $15 application fee.
  • Tory Burch Fellows program: This is a year-long fellowship program that includes a $5,000 grant for female entrepreneurs. There are 50 winners chosen each year. In addition to the money, the winners get access to workshops, business guidance and a one-week trip to the Tory Burch offices.
  • FedEx small business grant: This grant is open to more than just women, but FedEx has been open about their commitment to supporting the growth of women-owned businesses. In 2020, 47% of the grants FedEx awarded went to minority and women-owned businesses. The grand prize for this grant is $50,000, second place gets $30,000, and third-place winners get $15,000. Each winner also gets FedEx office supplies, too.
  • American Association of University Women (AAUW): This isn’t one specific grant; rather it’s a number of grants for different applicants, with varying deadlines and grant amounts. You can see all of the open grants through the AAUW website. These grants are open to women worldwide, so the competition might be tough but it’s worth trying if there’s a grant that’s a good fit for your business.

Unique challenges women face in small business financing

When it comes to female-owned small businesses, there are some positive trends across the industry. Between 2014 and 2019 the number of women-owned businesses increased by 21% while the number of businesses in general only increased 9%, according to American Express’s State of Women-Owned Business Report from 2019. But that doesn’t mean small business loans for women are easy to come by.

Throughout the COVID-19 pandemic, women business owners applying for PPP loans and traditional loans on average applied for less money than men did, according to researchers at the New York Fed, even though application rates and approval rates were consistent between men and women.

Creditworthiness and existing debt

Women have average credit scores of 704, just one point lower than the average for men, according to Experian. However, on average, women still make less money than men, have more credit cards open than men, and more student loan debt. All of these factors can impact whether female business owners are approved for a loan and, if they are approved, how much in financing they’re actually offered.

Limited industries

Roughly half of all women-owned businesses are in industries that generate lower revenue than other industries, which may make it harder to get financing from lenders that use business revenue as an approval factor. Those most popular industries are healthcare and social assistance, and professional, scientific and technical services, and "other services" according to the Amex report.

How to choose the best small business loan

A huge part of choosing the right loan for your company will come down to a few aspects of your business.

First, consider how your credit score and time in business match up with a lender’s requirements. Both of these aspects will help you determine which lenders are the right ones for you to explore. Once you determine that, you can move on to considering the type of financing your business needs.

If you’re looking for a lump sum of money to help your business expand, that’s very different from looking for invoice factoring that can cover operating costs. The reason you’re looking for loans or grants for female business owners will be a huge factor in choosing the best small business loan for you.

Other considerations include:

  • What you’ll use the funding for/type of loan
  • Repayment terms, timing and frequency
  • Interest rate
  • Early repayment penalties, origination fees and annual fees
  • Minimum and maximum loan amount offered and needed

FAQs about small business loans for women

What types of small business loans for women are there? Women business owners are eligible for most small business loans, provided they meet the loan’s eligibility requirements. Short-term and long-term loans, business lines of credit, invoice factoring, equipment financing, business credit cards are possible avenues for funding.

How are grants for women-owned businesses different from loans? Women-owned business grants typically do not need to be paid back like business loans do but they frequently offer far less in funding than a loan might. Plus, they’re also incredibly competitive and the application process can be long.

How do I apply for a loan for a female-owned business? To apply for small business loans for women you should gather your last tax return, business bank statements and any other information about your business’s financials. You’ll likely need this information to fill out the grant application plus they’ll ask for a business plan and proposal for what you’ll do with the grant money if you win.

How do I find a good lender? What makes a good lender will be different from one business to the next. But, a good rule of thumb is to find a lender that is clear about its terms and fees. Try to find one that has lower interest rates and won’t take advantage of your business’s vulnerabilities, and that has loans that match your business’s needs.

Nina Godlewski is a content marketer with a journalism background and a bachelor's degree in communication studies from Northeastern University. She loves to research complex business topics and break them down to make them more accessible for readers. She worked as a marketing writer for Fundera, covering small business topics like lending, credit cards, software, and services. She's also written for Newsweek, Business Insider, and Boston.com.

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