By Sarah Davis,
/ Advertising Disclosure

According to the US Census Bureau, women-owned businesses contribute to close to 20% of all US businesses and employ over 10.1 million workers. That is a significant part of the US economy, but unfortunately, women-owned businesses have smaller chances of getting a loan than businesses owned by men.

However, there are small business loans for women available from several sources. Below I’ll talk more about applying for one and sharing essential info on the best small business loans for women, including different options that fit startups owned by women.

Editor’s Last Update: Surprisingly, even in 2021, women-owned businesses have difficulties acquiring small business loans. After analyzing and vetting plenty of online lenders and other funding options, I’ve created the following guide for loan providers with better lending options for women business owners.

NOTE: There are no online lenders that provide loans only for women-owned businesses. However, after analyzing the offers, I’ve noted that some lenders have terms and conditions that would apply better for women-owned businesses. Read on to learn why!

Funding Options for Women-Owned Businesses

When selecting a loan for your small business, you should always aim to get the one that fits your company’s needs the best. That said, there are other criteria to take into consideration before a final decision is made. From SBA grants to online lenders, there are several funding options for women-owned businesses that could provide women entrepreneurs with the help necessary to launch and grow a business.

One of the main obstacles in finding business success is obtaining enough funding for growth, development, and expansion. Of course, small businesses owned by women face a double challenge, as many lenders are reluctant to provide loans for struggling businesses. Banks have more stringent eligibility criteria, but alternative lenders provide more funding options for women-owned businesses:

The 5 Best Picks Loans for Woman at a Glance

#1 – OnDeck one of the best online lenders today, OnDeck is a perfect option for women-owned businesses with good credit to get a significant business loan.

#2- SmartBiz  this online loan facilitator service is an excellent choice for small business loans for women-owned businesses, as it enables more accessible access to SBA and bank term loans.

#3- Kabbage –  any woman-owned business can apply for a business line of credit with Kabbage and get excellent terms with easy qualifying conditions.

#4 – Lending Club this is among the best loan options for women entrepreneurs looking to acquire a small business loan to develop their business. Lending Club is a peer-to-peer loan facilitator.

#5 – Fundbox  – any woman-owned business with poor credit can increase its chances of getting a small business loan by applying with Fundbox. This service has different ranking criteria than its competition.

You can get a better idea of these Lenders thanks to the comparison table I’ve made

Company Loan Min/Max Lowest Interest Rates Min Annual Income Min Time in Business
OnDeck $5,000/$250,000 10.89% $100,000 1 year
SmartBiz $30,000/$5,000,000 4.75% $100,000 2 years
Kabbage $1,000/$150,000 2.5% $50,000 1 year
Lending Club $5,000/$500,000s 4.99% $50,000 1 year
Fundbox $5,000/$150,000s 4.66% $50,000 1 year

Best Business Loans for Women (2021)

OnDeck – Pioneering Online Lender, Streamlined Application

ondeck

One of the best online lenders today, OnDeck is a fantastic option for a small business loan. The eligibility criteria are relatively achievable, and any healthy business should not have any issue with them.

The available OnDeck loans are a line of credit and term loans. The application criteria are the same for both: 1 year in business, business annual gross revenue of over $100,000, a personal FICO credit score of 600, and a business checking account.

Anyone fulfilling these conditions can apply for a loan with OnDeck through their online application. After consulting with a dedicated loan advisor, the funds can be received within 24 hours if the loan is approved. OnDeck supports any small business owner, as they’ve provided over $13 billion in small-business loans.

Why We Recommend

OnDeck is among the leaders in online lending and is always supporting small businesses. However, their business line of credit and term loans are both terrific options for women-owned business loans.

Best for

The loans by OnDeck are suited for all healthy businesses, women-owned or otherwise, needing a financial boost, as these come with clearly outlined terms and conditions.

Pros
  • Reasonable qualifying conditions
  • Line of credit and term loan available
  • Semi-automated application process
  • Clear terms and conditions
  • Fast funding if the loan is approved
Cons
  • Higher interest rates
  • Not available in all US states

Read the full OnDeck review

SmartBiz – Get an SBA (7)(a) Loan With Ease

SmartBiz

SmartBiz is a loan facilitator, as it enables qualifying businesses to apply for SBA loans and bank term loans. While the qualifying criteria are higher with SmartBiz, the available loans have much lower overall interest rates and better repayment terms. They facilitate loans from $30,000 to $5 million and have repayment terms from 10 to 25 years.

The variety of loans by SmartBiz are adequate for different businesses, and the application process is streamlined to enable each borrower to understand all the available options clearly. After analyzing your application, SmartBiz matches you with the right lender most likely to approve your loan. You can also use the SmartBiz Advisor tool to track the financial health of your business over time.

SmartBiz is an online service that supports all businesses and proudly announces that 30% of all SBA (7)(a) loans they’ve facilitated are granted to women-owned businesses.

Why We Recommend

SmartBiz is recommended online loan facilitator that has clear terms and conditions, loans, and about 30% of all SBA loans facilitated by SmartBiz were granted to women-owned businesses.

Best for

Any established business looking for a low-interest rate loan with long repayment terms, no matter if a woman or a man owns it, could apply with SmartBiz.

Pros
  • Long repayment terms
  • Several loan options
  • Loans from $30,000 to $5,000,000
  • Clear terms and conditions
  • Low-interest rates on SBA loans
Cons
  • High qualifying conditions
  • Not suited for startups

Read the full SmartBiz review

Kabbage – Great Option For a Business Line of Credit

Kabbage

Kabbage offers short-term loans for any qualifying business, with a primary aim on small and medium businesses that need a business line of credit. This lender has very loose qualifying conditions, as it does not require a minimum credit score.

While the available loan amounts by Kabbage go from $1,000 to $150,000, they have a particular loan offer for women. Any woman entrepreneur can apply for a Kabbage business line of credit loan, and if approved, she can get amounts of up to $250,000.

The qualifying terms are the same, as is the automated application process. The business needs to be active for at least one year and have a $50,000 annual income and a business checking account. The Kabbage interest rates are on the higher side, but it is the price for a loan with low qualifying terms.

Why We Recommend

Kabbage deserves to be recommended for its streamlined application process, clear upfront terms, low qualifying requirements, and loans designed for small businesses owned by women.

Best for

Any small business that needs a business line of credit fast could apply with Kabbage. The low application requirements and loans for women make Kabbage a fan-favorite among online lenders.

Pros
  • Low qualifying terms
  • Fully automated application process
  • Fixed repayment terms
  • Quick approval times
  • No credit score requirement
Cons
  • Short repayment terms of 6,12 and 18 months
  • High-interest rates

Read the full Kabbage review

Lending Club – Peer-to-peer Lender, Good Option For New Businesses

Lending Club

Lending Club is a P2P or peer-to-peer online loan processing service, also known as a leading marketplace. The service accepts loan applications, analyzes them, and then transfers the qualifying applicants to its partner and loan provider, Accion Opportunity Fund.

The loan amounts range from $5,000 to $500,000, and the repayment terms are from one to five years. The interest rates are average, and there are no extra or hidden fees, and the loan gets repaid in fixed monthly payments. To apply, you will need an annual income of $50,000, one year in business, a credit score of 600 and over, and at least 20% owner.

When we talk about loans for small businesses owned by women, Lending Club is among the top choices. Lending Club supports all women business owners, and they encourage every interested party to apply and get a quote.

Why We Recommend

Lending Club is a P2P loan marketplace, and as such, I would recommend it to businesses in good standing that need a cash influx with reasonable terms. Lending Club provides term loans, and these are also recommended for female entrepreneurs.

Best for

Considering all the facts, Lending Club is suited for small business loans and microloans for sole proprietors, freelancers, and looking for good funding with clear terms.

Pros
  • Clear loan terms
  • P2P loan marketplace
  • Reasonable qualifying conditions
  • Fast funding once approved
  • Fixed monthly repayment schedule
Cons
  • Hard credit check can affect your credit score
  • Only term loans available

Read the full Lending Club review

Fundbox

fundbox

Fundbox is the last online lender that we’ll talk about here, as the service has good loan terms for small businesses owned by women. The available loan offers by Fundbox are a line of credit and term loans of up to $150,000. The repayment terms are relatively short, but the qualifying terms are also very loose.

Fundbox is among the online loan provides who don’t check the credit score; instead, check the cash flow statements of a business. A business should be in business for as little as two months and have an annual income of $50,000 to qualify for a Fundbox loan.

Women-owned businesses have a good shot at getting a loan with Fundbox, as this lender supports business owners of any kind, including women, veterans, minorities, LGBTQ, and more. They use a data-driven model to remove any bias from the ranking system, so every applicant, whether a male or female entrepreneur, has an equal chance of getting a Fundbox loan.

Why We Recommend

I would recommend Fundbox as a viable financing source due to its low qualifying requirements, reasonable loan amounts, transparent terms, and fast funding.

Best for

Fundbox would be a suitable funding option for any business with a poor credit score, no matter if it is owned by a woman or a man, looking to get financing fast.

Pros
  • Low qualifying terms
  • No credit score requirement
  • Automated application process
  • Fast funding if approved
  • No prepayment penalties
Cons
  • Short repayment terms
  • High-interest rates

Read the full Fundbox review

How Do We Rate Loans for Women?

When looking for the best online lenders who provide loans for women, I used the following criteria:

  • Eligibility criteria
  • Loan amounts
  • Loan rates
  • Repayment terms
  • Type of loans offered
  • Complexity of loan application
  • Transparency of terms and conditions

Types of Small Business Loans for Women

While above, I’ve covered the best online lenders providing small business loans for women; let’s talk about the other types of business loans for women entrepreneurs:

SBA (7)(a) Loans – this type of loan is a good choice for women-owned businesses that have been in business for at least two years and have a profitable business model. The Small Business Administration backs the loans, which encourages other lenders to provide good loans for the business. The SBA loans come with excellent rates and repayment terms but have very high qualifying criteria.

Microloans – the microloan is a viable option for any small business, with women-owned businesses having a greater chance of getting one through microloan operators catering to women entrepreneurs. The microloans are term loans with smaller amounts and with monthly repayment schedules.

Grants for Women – grants are usually lower amounts of funding that do not require repayment. The grants are awarded to all applicants who qualify, and the grant programs usually have a limited amount of funding available. Check out our list of the best grants for women.

Alternative Financing Options for Women

Any woman-owned business looking for financing should also consider other alternative financing options. I’ve selected the top ones that have achievable qualifying conditions and lend to female entrepreneurs:

Funding Circle

Funding Circle is a peer-to-peer lender with low rates, long repayment terms, and reasonable qualifying conditions. Funding Circle supports all business owners. It has resources for funding women’s businesses, so any small business owned by a woman that qualifies for a Funding Circle loan can find this a suitable funding option.

Kiva

Kiva is a sort of crowdfunding platform for loans, and it provides microloans for up to $15,000. The repayment terms are excellent, as the $15,000 loan comes at 0% interest for all US-based qualifying businesses, and the repayment terms go up to 36 months. The platform is visited by over 1.6 million lenders globally, so as a woman-owned business, you should prepare a great story and invite people to fund your business.

CanCapital

CanCapital is a loan provider that offers Merchant Cash Advance loans. The lender provides you with an up-front sum of working capital, and you pay them back with a percentage of your future sales. This type of loan is very suitable for retail and service businesses. And not surprisingly, these types of businesses are predominantly owned by women.

Eligibility Criteria and Documents Required for Business Loans for Women

Lender Credit Score Time in Business Industry type Proof of ownership Annual Income Social Security Number
OnDeck V V V V V V
SmartBiz V V V V V V
Kabbage X V V V V V
Lending Club V V V V V V
Fundbox X V V V V V

How to Calculate EMI for Business Loans for Women?

EMI stands for Equated Monthly Installment, or in other words, the EMI is the monthly repayment you have to make to your lender. The EMI consists of the principal amount borrowed and the interest accrued. To calculate the EMI for a loan, you can use the following formula:

E = P x r x (1+r)n/(1+r)n-1, where

  • E= EMI amount
  • P= Principal amount
  • r= rate of interest
  • n= tenure of the loan

How To Avoid Getting Denied a Business Loan for Women?

When applying for a business loan as a woman entrepreneur, you should do everything in your power to ensure you have the best opportunities for getting a small business loan:

  • Have a great business plan in place – the business plan is the base on which you build your business, and many lenders will ask to see it before granting you a business loan. The business plan contains a summary of your company, the market you are trying to reach, an outline of your products, and your financial state. Learn how to create a fantastic business plan here.
  • Improve credit score – most online lenders look at credit score as a primary decision factor. Aim at improving your credit score, and aim for a figure over 700. To do so, you can first check your personal and business credit scores and check for errors, and rectify them. To improve your credit score, you should pay as much as you can from your outstanding debt and pay your bills on time.
  • Don’t apply for several loans at once –  if you apply to several lenders at once, an immediate red flag will go up with credit bureaus, reflecting adversely on your credit score. It is also a way to get denied by all lenders.
  • Prepare all documents beforehand – before you apply for a loan, have all your paperwork in place. Most lenders require access to your accounting software so they can check your book and balances, as well as the minimum annual revenue. Don’t forget the proof of ownership and cash flow statements.
  • Adapt to every situation – women entrepreneurs usually have a more passive attitude towards business, and this is the primary reason women get fewer loans than men. So, to improve your chances of getting a loan, you should adapt to the situation and clearly demand what you need.

Conclusion:

Women business owners tend to get loans less often than men business owners. There are some complex psychological factors at play here, but we see changes in these practices in recent times. More and more women-owned businesses apply and get funding through online lenders, primarily due to improved confidence levels in female entrepreneurs. Still, no matter the reasons, we see a positive trend of women-owned small businesses, and they have improved options for financing and business success.

  • Best Overall: OnDeck
  • Runner-Up for Best Overall: Kabbage
  • Best for Pricing: SmartBiz
  • Best for Women-Owned Businesses: Lending Club
  • Best for Repeat Borrowing: OnDeck
  • Best for Business with Bad Credit: Fundbox

FAQs: Most Popular Questions Related to Loans for Women-Owned Businesses

What Are the Qualifications for a Business Loan for Women?

The qualifications for a business loan are the same for men and women entrepreneurs. The exact criteria depend on the lender, but generally speaking, these are the necessary qualifications:

  • Good credit score (600 and over recommended)
  • Proof of business ownership
  • Business plan in place
  • Good annual revenue ($50,000 and over recommended)
  • All legal and financial documents in order

Why Do Women-owned Businesses Get Their Loan Applications Denied More Often?

It comes down to why women-owned businesses get their loan applications denied more often; there is no single answer. It is due to a complex set of causes. One of these is that women entrepreneurs usually ask for a lower loan amount and don’t have the cash for a downpayment. The other reasons are the poor credit score many women have and the lack of support system in place. Also, many times, women tend to be more passive when it comes to business decisions.

Which Funding Options There Are for Women-owned Startups?

The women-owned startups can ask for funding from several places. These include online lenders, bank loans, grants, crowdfunding, angel investments, and venture capital for women, microloans, and more. There are online tools that provide free online training for female entrepreneurs like DreamBuilder. Any woman business owner should take advantage of the free online tools for small business owners.

Can Women With Bad Credit Get a Business Loan?

Yes, just like any other small business owner with bad credit, women business owners with bad credit can apply for a loan with online lenders that don’t consider credit scores. Learn more about these options in our detailed guide for small business loans for bad credit.

What Are the Average Loan Amounts for Business Loans for Women?

There are many discrepancies related to men and women-owned businesses. According to a Biz2Creidt Women-Owned Business Study, the average loan size for a woman-owned business in 2020 was $36,981, whereas the average loan size for a man-owned business was $55,061. I need to note here that this is partially due to the businesses’ nature and the credit score differences between male and female borrowers.

What Are the Factors That Determined My Sanctioned Loan Limit?

The determining factors that determine the eligibility of a loan are debt-to-income ratio, credit score, credit history, financial profile, age of business, city of residence, and more.

What Is the Quickest Way to Get a Loan As a Woman?

Like any other small business owner, women entrepreneurs have the greatest chance of acquiring a loan through online lenders. These services have automated and streamlined application processes and rapid loan approval rates.

Sarah Davis
Sarah Davis
Sarah Davis is a business executive specializing in mergers and acquisitions, corporate finance, and international law. She achieved her MBA from Cornell University after completing a legal undergraduate at UC Berkley. Sarah runs her own business consultancy firm in tandem with working alongside the FinImpact team.