4 Small Business Loans for Women-Owned Businesses


Women are redefining the world of entrepreneurship. That’s why many are working hard towards qualifying for SBA loans. The following statistics from the National Association of Women Business Owners can attest to that.

    • 39% of private companies in the United States are run by women
    • Women entrepreneurs employ 9,000,000 workers
    • More than 11.6 million companies are women-owned

The number of businesses owned by women is rising rapidly every year. In fact, it’s twice the rate of male-owned companies. But despite the rapid growth, women’s access to small business loans remains limited. Fortunately, alternative lenders make it easier for businesswomen to qualify for the best business loans available today. Specifically, SBA loans, business lines of credit, term loans, and invoice financing.

1. SBA Loans

The Small Business Administration (SBA) was created specifically for small business owners looking to qualify for bank-rate financing. SBA loans are best for women who need long-term financing and have a great credit rating. The SBA offers several government-backed loan programs for small business owners. The government guarantees up to 85% of the loan, lowering the risk for lenders, which in turn serves as a motivator for them to lend money to small business owners.

There are different types of SBA loan products you can choose from, but three of the most popular options are the SBA 7(a) loans, SBA CDC/504 loans, and the SBA microloan program.

  • 7(a) loans are the most popular SBA loan option. It’s a general-purpose loan, which means you can use it for just about anything.
  • CCDC/504 loans are specifically used to purchase commercial real estate or equipment and machinery.
  • Microloans are for small business owners that need small amounts of money. This type of funding can go up to $50,000, so it’s an ideal package for startups and microbusinesses.

Related: SBA Loan Application: The Complete List of Documents

2. Business Lines of Credit

A business line of credit is best for women who need flexibility in the use of funds. Once qualified, lenders assign you to a predetermined credit limit where you can withdraw funds from as needed. Unlike traditional loans, you don’t have to use every penny. You can even let the money sit in the accounts for months until you need it. The best part is you only have to pay interest on the funds you’ve used.

Once you repay the money you’ve withdrawn, your credit limit goes back up again. You can use the funds from a business line of credit to make payroll, pay for unforeseen expenses, or use it as standby working capital or as an emergency fund.

3. Term Loans

Business term loans are what most people are familiar with when it comes to business loans. Lenders give you a lump sum upfront and you repay the loan over a specified period of time. Depending on the type of term loan, the repayment terms can last from a few months to 10+ years. You often need collateral to secure the loan, which means the repayment terms are longer than unsecured loans. Commercial real estate, inventory, machinery and equipment are some of the collateral lenders consider for term loans.

The funds from a business term loan can be used to grow and expand your business. You can also use it for just about any purpose, as long as it’s for the benefit of your business. There are different types of term loans, so best you carefully choose the one that’s best for your business.

Related: How to Choose the Best Type of Business Term Loan for You

4. Invoice Financing

If your company has outstanding invoices, you may want to consider invoice financing. Instead of waiting for 30, 60, or 90 days to get paid, invoice financing allows you to sell these pending invoices to third-party companies at a discount. Lenders will give you 80% to 90% of the total invoice value upfront, and you’ll receive the remaining balance (minus a small fee) once your clients pay their invoices.

Invoice financing is great for companies that sell products and services to other companies. However, you need to ensure that your clients are reliable because lenders are more interested in your clients’ credit ratings rather than your business’ credit. Invoice financing also benefits companies that need immediate funding to address business expenses.

Discover SBA Loans, Invoice Financing, Business Line of Credit, and Term Loans

SBA loans, business lines of credit, term loans, and invoice financing are all viable loan options for businesswomen. If you choose the right lender, you’ll be able to get the ideal terms and interest rates you desire. Use the cash right and you’ll see your business grow and expand in no time.

Ezra Cabrera
Ezra Neiel Cabrera has a bachelor’s degree in Business Administration with a major in Entrepreneurial Marketing. Over the last 3 years, she has been writing business-centric articles to help small business owners grow and expand. Ezra mainly writes for SMB Compass, but you can find some of her work in All Business, Small Biz Daily, LaunchHouse, Marketing2Business, and Clutch, among others. When she’s not writing, you’ll find her in bed eating cookies and binge-watching Netflix.

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