With 4 out of every 10 businesses owned by a woman in 2019, female business ownership is on the rise. While the lending gap continues to narrow between male and female business owners, women who own small businesses may still find it more difficult to secure funding, and in some cases may end up paying higher rates and fees. Luckily, there are a variety of lenders out there that specialize in small business loans for women. When it comes to applying for business loans, you should look for lenders with low rates, easy application processes and customer-friendly platforms. While business loans aren’t for everyone, under the right circumstances they can give you the funds you need to help your business flourish.
The 6 best small business loans for women
- Funding Circle – Best overall
- Lending Club – Best peer-to-peer loan
- National Funding – Best for bad credit
- Kiva – Best for microloans
- Lendio – Best for startups
- Street Shares – Best for veterans
|Lender||APR||Loan Amount||Terms||Key Benefit|
|Funding Circle||12.18% – 36%||$25,000 – $500,000||6 – 60 months||Easy application process|
|Lending Club||4.99% – 29.99%||$5,000 – $500,000||6 – 60 months||Low rates|
|National Funding||5% – 8%||$5,000 – $500,000||6 – 15 months||Accepts bad credit|
|Kiva||0%||Up to $15,000||Up to 36 months||No interest|
|Lendio||Varies||$500 – $5M||Varies||Large network of 75 lenders|
|Street Shares||8% – 39.99%||$2,000 – $250,000||3 – 36 months||Focuses on veteran-owned businesses|
The best small business lenders for women
Funding Circle – Best overall
Funding Circle focuses exclusively on small business loans, including small businesses owned by women. Its online application process is quick and easy, and you can have a decision within a day or two. Funding Circle also considers more than just credit scores when it comes to loans, and also takes into account other indicators of a financially healthy business. Loan terms range from six to 60 months, and business owners can borrow up to $500,000. Funding Circle does charge a few fees, including an origination fee and a late payment fee. However, it doesn’t charge any servicing fees, monthly processing fees or prepayment fees.
Lending Club – Best peer-to-peer loan
Lending Club offers peer-to-peer loans for both individuals and small businesses. Its rates start at 4.99% for the most qualified borrowers, and the application process is less than five minutes. In order to be eligible, business owners must be in business for at least 12 months, make at least $50,000 in annual sales, own at least 20% of the business and not have any recent bankruptcies or tax liens. Business owners must also have a fair or good personal credit score. Lending Club does charge an origination fee, but there’s no prepayment penalty.
National Funding – Best for bad credit
National Funding supports women-owned small businesses by offering competitive loans for women business owners and entrepreneurs. It is an alternative lender with fewer restrictions than traditional lenders, and borrowers with less than perfect credit are welcome to apply. This means that even if you have poor personal or business credit, you may still be able to qualify. Unlike some lenders with stricter eligibility requirements, National Funding takes a holistic approach to your creditworthiness, and won’t reject you automatically just because of your credit score. The loan application process takes just a few minutes, and prospective borrowers can have a decision ready in as little as 24 hours. The funds from a small business loan can be used for a variety of purposes, including hiring employees, purchasing equipment, inventory, bills and paying licensing fees. Loan amounts range from $5,000 to $500,000, and rates and vary between 5% and 8%.
Kiva – Best for microloans
Kiva is a unique online lender that offers no-interest microloans of up to $15,000. If you only need a small loan to boost your business, it’s a great option, especially since you pay no interest. This lender is not-for-profit, with a mission of expanding access to capital for entrepreneurs and small business owners. It has a special emphasis on helping women-owned businesses thrive. It also has a built-in marketing platform where business owners and entrepreneurs can advertise their products and find new loyal customers. An application takes 20 to 30 minutes, after which prospective borrowers must prove their creditworthiness by inviting friends, family and customers to lend to them. The loan is then made public on Kiva, and investors worldwide can contribute. Borrowers then have up to 36 months to repay their loans.
Lendio – Best for startups
Lendio is another type of lending marketplace that offers funding for women-owned startups by giving business owners access to a marketplace of over 75 lenders. This allows small business owners to be matched with lenders that suit their needs after submitting an application. There’s a fast and easy application process, as well as personalized guidance along the way and funds are deposited into your account as soon as 24 hours. Lendio rates vary depending on your particular situation and the lender your decide to work with, so it’s a good idea to shop around to make sure that you’re getting the best deal.
Street Shares – Best for veterans
Street Shares is a lender dedicated to helping veteran small business owners. It offers loans from $2,000 to $250,000, with repayments terms of 3 to 36 months. You can get preapproved without impacting your credit, and funds are deposited immediately into your account after approval. There are no prepayment penalties, so you can repay your loan at any time without incurring additional fees. You must have been in business for at least a year and be a U.S. resident in order to qualify. Street Shares does require weekly payments, so they may not be the best fit for borrowers who prefer a monthly bill.
How to get approved for a small business loan
There are a few simple steps that can improve your chances of being approved for a small business loan. These include:
- Review business finances: Reviewing your finances can give you a better sense of what loans you might qualify and can help you to target your applications to the right lenders.
- Strengthen credit score: Higher credit scores can unlock lower rates and a wider variety of lenders.
- Gather the required documents: Many lenders require you to submit information about your business during the application process, so be sure to gather any documents you think you might need, including information about your yearly revenue and business history.
- Develop a business plan: Many lenders are likely to look favorably on prospective borrowers if they have a strong business plan. Whether you’re just starting out or have been in business for several years, it’s a good idea to come up with a plan for how these funds will help your business succeed.
Small business loan alternative for women
In addition to small business loans, there are a variety of other funding avenues women who are small business owners may want to pursue. These include:
- Grants: Grants are essentially free money, so they should always be at the top of the list when it comes to funding sources for small businesses. Grants geared specifically toward women include grants from Grants.gov, the Girlboss Foundation and the Eileen Fisher Women-Owned Business Grant.
- Angel investors: Angel investors are wealthy individuals who believe in a particular business or startup enough to invest substantial capital in its growth.
- Venture capital: Venture capital is another funding option to consider for women-owned small businesses. Venture capital is usually offered in exchange for partial ownership and control over a company.
- Crowdfunding: Crowdfunding is a great option for small business funding, especially if you have a particular product or project that you think can garner widespread support. Popular crowdfunding platforms include Kickstarter, Indiegogo and GoFundMe.
- Small Business Association Loans: The Small Business Association offers loans to qualified borrowers, including women who are small business owners.
The bottom line
If you’re a woman and a small business owner or entrepreneur, it’s a good idea to explore funding options that are dedicated to helping women in business succeed. Small business loans for women can give you the capital you need to give your business a big boost.