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Funding, Women in Business

3 Ways Business Loans for Women Have Advanced

Business Loans for Women

Women have shown that they are truly a force to be reckoned with in the business community. In fact, a recent report by American Express shows that as of 2016 there are an estimated 11.3 million women-owned businesses in the United States. These businesses employ nearly 9 million people and generate more than $1.6 trillion in revenue. This represents a 45 percent increase in women-owned businesses between 2007 and 2016, as compared to the 9 percent growth of all businesses.

It should come as no surprise that as women-owned firms grow at a rate five times faster than the national average, the options for business loans for women are also growing. Though women entrepreneurs are still only receiving 4.4 percent of total small business loan funds, many organizations are recognizing the potential of women-led businesses and working toward improving the financing options for women entrepreneurs.

3 Ways Business Loans for Women Have Advanced

  1. There are many small business loan opportunities just for women entrepreneurs.

Women who are planning on starting or currently run a small business have access to funding options that have been created just for women entrepreneurs. The U.S. Small Business Administration has loan programs that are geared toward women business owners. An SBA Microloan gives special consideration to women and minority-owned businesses. This program is funded by the SBA and available for small business owners who are seeking less than $50,000. Women entrepreneurs are also eligible to apply for an SBA-backed loan with a community bank through the SBA 7(a) or 504 loan program.

There are also many grant opportunities for women entrepreneurs who qualify, such as the Eileen Fisher Women-Owned Business Grant Program, which awards five grants annually to businesses that are 100 percent women-owned and focus on social consciousness, sustainability and innovation. To qualify, the businesses need to be ready to move on to the next phase of business development.

  1. More investors are beginning to back women-owned businesses.

Angel investors and venture capitalists offer one of the greatest range of financing options for women-owned businesses. This may not be the best option for women running small businesses, as these individuals expect a return on investment. However, those who are expecting an enterprise level of business growth may consider investor financing.

Here are a few great places to find individuals who are looking to fund women business owners:

  • Golden Seeds – Since 2005, Golden Seeds has invested over $70 million in more than 65 companies run by women. This organization focuses on early stage startups, which makes it a great option for those who have only been in business for a short amount of time. Golden Seeds also offers coaching and networking opportunities.
  • Astia – Founded in Silicon Valley in 1999, Astia aims to promote angel investment opportunities for women entrepreneurs by connecting women-led businesses with interested investors. The organization provides women leading, investment-ready companies with access to both capital and resources.
  • Pipeline Angels – Pipeline Angels is a network of new and seasoned women investors. This organization creates new opportunities for women social entrepreneurs to get the capital they need to fund their businesses.
  1. Women have more options for small business loans.

A recent report from the U.S. Senate Committee on Small Business and Entrepreneurship shows that only 16 percent of conventional loans and 17 percent of SBA-backed loans are given to female entrepreneurs. Even when these women business owners are granted loans from these sources, their funding amount is often less than their male counterparts.

This may seem a bit discouraging for women business owners. However, in the face of these challenges, alternative online lenders like Kabbage present new and different opportunities for women entrepreneurs who are not approved for traditional loans. With alternative options, women business owners who may not qualify for bank or SBA-backed loans can still get the capital they need to start and run their business

Rather than looking just at the female business owner’s credit score, Kabbage looks at data from a variety of sources, including PayPal and UPS, to get the information necessary for approval. The application process is shorter and simpler than the typical loan application, with a quicker loan decision time. These alternative business loans for women allow entrepreneurs to get the funds they need even if they have been turned down by other traditional funding sources.

Though funding opportunities for women business owners may still not be equal to that of their male counterparts, there are a variety of options, like business loans for women, that are specifically geared towards female entrepreneurs who are seeking capital for their startups. As women-owned businesses continue to grow and flourish, there is a good chance that even more opportunities will arise, allowing women to advance their careers and grow their companies.

If you’re interested in learning more about Kabbage, visit our business loans for women page. 

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Kabbage Team

Kabbage is here not only to provide access to the small business funding you need, but to also help you grow your business through free marketing tips, webinars, tools and more. Is there something you'd like us to cover or want to get your small business featured on our blog? Send us a note at content@kabbage.com.