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4 Places that Offer Small Business Loans for Women

Small Business Loans for Women

Women who own small businesses are certainly a powerful force to be reckoned with. According to the National Association of Women Business Owners, there are more than 9.1 million firms owned by women in the United States. As of 2015, these women-owned businesses generate $1.4 trillion in sales and employ close to 7.9 million people throughout the country. These numbers are hard to ignore, yet some women still have difficulty getting the funding that they need to start and grow their businesses.

In fact, a recent study shows that women are 21 percent less likely to win a federal business contract, and women small business owners are still being overlooked for business loans in the current banking climate. The reasons that women have difficulty obtaining loans may vary, but many of the factors are similar to other business owners – strict banking requirements, lack of collateral, perceived risk, and lack of preparation.

The good news is that the government and other lenders such as fintech organizations have opened up some very exciting opportunities for female business owners who need funding. There are now a range of options for small business loans for women that help female entrepreneurs get their businesses up and running.

More Opportunities for Women Small Business Owners

As more and more women begin to develop their own businesses, there are more efforts being made to help these female entrepreneurs start and grow their businesses. In 2014, a law was passed that offered women-owned businesses equal opportunity to no-bid federal contracts that was preciously only accessible to disadvantaged and minority-owned businesses. This law was aimed at helping more women get the experience they need to grow their businesses.

Fintech has also opened up an exciting opportunity for women small business owners. Alternative lenders like Kabbage offer flexible funding options that help small business owners who may have been overlooked by traditional lenders obtain the capital they need to start or expand their businesses. Using an automated, online loan application process that takes into account more than just credit score, fintech organizations offer quick loan decisions and fast funding for women business owners.

4 Places that Offer Small Business Loans for Women

There are a number of places that offer small business loans for women who want to start or expand their business. This list will cover some of the loan options as well as the pros and cons of each opportunity.

1. Traditional Bank Lending

Every business owner can try for traditional bank lending, and this includes female entrepreneurs. However, when you look at small business lending by the numbers, you will find that it is much more difficult for small business owners to obtain traditional loans. In fact, businesses are less likely to get a business loan if they need less than $250,000, they have been in business for fewer than two years, and they have a credit score of less than 640.

In addition, female small business owners face their own unique challenges. More than two-thirds of women-owned businesses have less than $25,000 in revenue, which can make it difficult for these business owners to obtain a loan. In addition, the potential discrimination that many women face may also unfairly cause lenders to misjudge perceived risk for female business owners.

2. Microlending

The Small Business Association (SBA) microloan program was created to help small business entrepreneurs get the funding they need, especially those in underserved markets such as women and minority entrepreneurs. This can be a great option for women business owners as these microloans are often given to those who do not qualify for traditional bank lending.

In fact, according to one report on the microloan program only 16 percent of conventional small business loans in 2014 were issued to women-owned businesses while 46.7 percent of mircroloans were issued to businesses owned or controlled by women.

3. Venture Capital

Venture capital is another useful alternative funding source for female entrepreneurs. This option allows women to trade equity for financing. One major downside to venture capital is that many venture capital funds are still dominated by men who are often less willing to invest in female entrepreneurs.

Female venture capitalists are more likely to invest in women-owned businesses. However, currently only about 10 percent of venture capitalists are female. The good news is that the number of female venture capitalists and angel investors is growing, and as this number continues to increase so will opportunities for female entrepreneurs.

4. Alternative Online Lending

When women are unable to obtain funding through traditional lenders or need to fill gaps in funding from other sources, alternative lending is often the best option. Alternative lenders like Kabbage have been helping small businesses of all types get the funding they need when they are turned away from traditional banks.

A small business line of credit or business loan from an alternative lender can be used by women business owners to fund start-up and growth costs such as investing in equipment, hiring more employees, and developing marketing resources. The flexible funding options make it easy for women business owners to get and manage their business funds online.

 

Now that you know what your options are for small business loans for women, what are you waiting for? Right now is a great time for female entrepreneurs to get the funding they need to start, run, and grow their small businesses.

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

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Kabbage Team

The Kabbage Team is here to not only fund the small business loans you need, but to 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.

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