According to the National Association of Women Business Owners (NAWBO), more than 9.4 million businesses were owned by women in 2015. While ranging in size and scope, these firms employed 7.9 million people and collectively generated $1.5 trillion in sales last year. Further, women-owned firms made up more than 31% of all privately-held firms in the U.S. in 2015.
All of these stats and others show that, more than ever, women are a force to be reckoned with in the business world.
None of this might be possible without the banks and lenders who offered up their funds – and their trust – to women-led businesses forging new paths. Business loans can often be the defining factor that allows new business owners to fail or succeed, whether male or female. With enough start-up cash, new businesses are able to hire employees, buy equipment and supplies, and cover other major expenses like rent. Without enough funds, on the other hand, new businesses are bound to fail or struggle to get off the ground.
While business loans are readily available to all business owners regardless of gender or age group, having bad credit presents an exceptional hurdle for most people. When you have bad credit, it’s much more difficult to qualify for the funds you need. And even if you do qualify, you might need to pay an unreasonably high interest rate to make up for the extra risk.
Three Lenders for Women Business Owners with Bad Credit
Certain lenders make the loan process slightly easier for women entrepreneurs with bad credit, however. By loosening requirements and considering other factors outside of your credit score during the underwriting process, these lenders offer more business loans for women with bad credit than most.
If you’re a woman with bad credit who’s ready to strike out on her own, consider these lenders:
If you’re willing to consider alternative financing, turn to Lending Club for your business loan needs. Depending on your credit score and how long you’ve been in business, you could score a loan with an annual percentage rate as low as 8%, though rates can get as high as 32%.
Loan amounts generally fall between $5,000 and $300,000, although your credit score and business plan will impact how much you’re able to borrow. Most loan terms last between one and five years. The big difference here is that your loan will be peer-to-peer — meaning it’s funded by individual investors, and not a traditional bank.
Street Shares is another lender that’s often willing to extend business loans to women with bad credit. You can qualify for either a traditional loan or a line of credit you can borrow against, both with annual percentage rates between 9% and 40%.
Most loans funded through Street Shares are for between $2,000 and $100,000, although the amount you can borrow will depend on your creditworthiness and cash flow. Generally speaking, Street Shares prefers to loan money to female-led businesses that have been open for at least one year.
With fairly loose credit qualifications for small business owners, OnDeck offers loans that are somewhat easier to qualify for. With OnDeck, you can borrow anywhere from $5,000 to $500,000 depending on your business needs and credit score. Their traditional loans come with APRs in the 9% to 98% range, while their lines of credit are slightly more affordable with rates between 4% and 40%. How much you can borrow and the terms of your loan will depend on your credit score, your business plan, and other factors.
Non-Credit Factors Some Lenders Consider
If you have poor credit but still need a business loan, don’t despair. Some of the lenders on this list will consider factors outside your credit score when determining eligibility.
According to small business lender Fundera, some banks and online lenders will consider the following factors in addition to your credit score:
- Annual revenue: Some lenders consider how much revenue your business brings in each year when determining your eligibility for a loan. If your credit is bad but your business is solvent, your ability to qualify for a business loan becomes much more likely.
- Profitability: In addition to your annual revenue, lenders will want to see real profits as well. If your revenue is okay but your expenses are considerably lower, this will work in your favor when it comes to qualifying for a business loan.
- Debt: A large debt load tells lenders you might struggle to repay your loan, while relatively low debt tells them you’re smart with your business funds. Also, when it comes to business loans for bad credit, lenders want to know who else you’ve worked with. “If you’re currently paying back a small business loan, you might have trouble qualifying for a second loan,” notes Fundera.
While business loans for women with bad credit might be hard to come by, several lenders offer unique products that serve this demographic. As with anything else, however, it’s crucial to make sure you understand your loan’s terms and conditions before you sign on the dotted line. Before you borrow, make sure you know what you’re getting into.