7 Best Small-Business Loans for Women
Updated March 26, 2024 at 11:53 am
Women-owned businesses face their own unique challenges, from generating marketing support to accessing funding. Not only are these businesses vital to the communities they’re in, but they’re an integral part of the economy. The best business loans for women offer access to funding for a wide variety of uses, so women-owned businesses can continue to contribute and thrive.
Our Methodology Newsweek Vault’s loan experts evaluated multiple data points to help our readers make sense of their borrowing options across student loans and personal loans. To narrow down the best available offers, we weigh the product pros and cons across five core categories, including:
- Application process
- Eligibility requirements
- Interest rates
- Loan amounts (minimum and maximum)
- Repayment flexibility
Our Picks - Best for High Loan Limits: SBA 7(a) Loan
- Best for Long Repayment Terms: SBA Express Loans
- Best Line of Credit: American Express Business Line of Credit
- Best for Building Business Credit: OnDeck
- Best for Women With Bad Credit: Fora Financial
- Best for Quick Funding: Bluevine
- Best Business Term Loan: SMB Compass
Best Small-Business Loans for Women of 2024
Best for High Loan Limits
SBA 7(a) Loan
Vault Verified
Why we chose it: The Small Business Administration (SBA) partially guarantees the SBA 7(a) loan, making it a solid choice for women looking for higher borrowing limits and longer repayment terms. You can use the funds for a wide range of business purposes, including real estate purchases, short- and long-term working capital needs, refinancing current business debt and much more.
Pros
- High borrowing limits
- Long repayment options
- Capped interest rates
Cons
- Tremendous amount of paperwork and long funding times
- Requires collateral for loans of $50,000 or more
- Full process (including funding) can take anywhere between 30 and 90 days
Additional Information
Interest Rates
Maximum amounts (varies by lender):
- Up to $50,000: Base rate + 6.5%
- $50,001 to $250,000: Base rate + 6%
- $250,001 to $350,000: Base rate + 4.5%
- $350,001 or more: Base rate + 3%
Earliest Funding Time
At least 30 days
Minimum Requirements
- Business operating for profit in the U.S.
- Fall under SBA size requirements and not fall under ineligible business types
Best for Long Repayment Terms
SBA Express Loans
Vault Verified
Why we chose it: SBA Express Loans offer either term loans or a line of credit, partially backed by the SBA and with borrowing amounts up to $500,000. You can use these funds for a range of business uses, including expansion, renovation and real estate, but they offer competitive rates and up to 25 years for repayment in some cases.
Pros
- Repayment terms up to 10 years for most loan purposes and 25 years for real estate purchases
- Quicker funding time versus other SBA loans (based on the lender)
- Can use for debt refinancing and other purposes
Cons
- Loans more than $50,000 likely require collateral
- Less of the loan is guaranteed by the SBA (only 50%)
- Funding times can still take over 30 days
Additional Information
Interest Rates
Maximum amounts (varies by lender):
- Up to $50,000: Base rate + 6.5%
- $50,001 to $250,000: Base rate + 6%
- $250,001 to $350,000: Base rate + 4.5%
- $350,001 or more: Base rate + 3%
Earliest Funding Time
Varies, can take over 30 days
Minimum Requirements
Varies by lender but typically requires two years in business
Best Line of Credit
American Express Business Line of Credit
Vault Verified
Why we chose it: A line of credit offers incredible flexibility because you withdraw when you truly need it and only pay interest or fees on what you borrow. The American Express Business Line of Credit not only makes it easy to withdraw funds, but it only requires $3,000 in monthly revenue for consideration—one of the lowest requirements among lenders.
Pros
- Only requires a monthly revenue of at least $3,000
- Expansive borrowing range and multiple repayment options
- No extra fees, such as maintenance fees or prepayment penalties
Cons
- Higher credit score requirement
- Monthly fee structure is based on amount borrowed
- Requires a personal guarantee
Additional Information
Interest Rates
Monthly fees charged:
- 3-9% for 6-month loans
- 6-18% for 12-month loans
- 9-27% for 18-month loans
- 12-18% for 24-month loans
Earliest Funding Time
Minimum 1 to 3 business days
Minimum Requirements
In business at least one year, monthly revenue of at least $3,000
Best for Building Business Credit
OnDeck
Vault Verified
Why we chose it: Taking out a business loan doesn’t automatically guarantee building business credit—only working with vendors who report payment activity to the commercial credit bureaus will. OnDeck reports payment activity for commercial purposes, which can help you further down the road as you seek additional funding opportunities or partner with strategic vendors.
Pros
- Reports to commercial credit bureaus
- Funds may be available the same business day
- Minimal documentation required
Cons
- Higher interest rates
- Secured loan option, which may require a lien on business assets
- Must be in business at least one year
Additional Information
Interest Rates
Average of 60.9% APR
Earliest Funding Time
Same business day
Minimum Requirements
At least one year in business, a business checking account, $100,000 in annual revenue
Best for Women With Bad Credit
Fora Financial
Vault Verified
Why we chose it: A lower credit score is often a major barrier for anyone applying for business loans, but Fora Financial considers applicants with a credit score of at least 500. Plus, it reports payment activity to the commercial business bureaus, which can aid in securing greater funding down the road.
Pros
- Considers applicants with a minimum credit score of 500
- Reports payment activity to commercial credit bureaus to help build business credit
- Requires minimal documentation
Cons
- Requires a personal guarantee
- Higher borrowing costs
- Requires daily, weekly or monthly repayment plans
Additional Information
Interest Rates
15 to 40 cents per dollar
Earliest Funding Time
24 hours
Minimum Requirements
At least 6 months in business; your business must generate at least $15,000 in monthly gross sales
Best for Quick Funding
Bluevine
Vault Verified
Why we chose it: You may have an opportunity where you need to act quickly, such as purchasing inventory at a discount or getting equipment repaired right away, which may require cash your business doesn’t currently have. Bluevine not only offers quicker approval decisions within minutes, but you may receive funding within hours of approval.
Pros
- Line of credit so you only borrow what you need, when you need it
- Larger borrowing amount available
- Competitive interest rates
Cons
- Requires a hefty $40,000 in monthly revenue for approval
- Personal guarantee required
- Not available in all states (excludes Nevada, North Dakota and South Dakota)
Additional Information
Interest Rates
As low as 6.2% APR
Earliest Funding Time
As soon as a few hours
Minimum Requirements
At least two years in business, $40,000 in monthly revenue, operating or incorporated in a U.S. state, business in good standing and no bankruptcies within the last year
Best Business Term Loans
SMB Compass
Vault Verified
Why we chose it: Term loans offer consistent repayments in installments, so your business can adequately budget for paying back the loan. SMB Compass not only offers competitive interest rates and unparalleled borrowing amounts, but your business may qualify for longer repayment terms too.
Pros
- Huge borrowing range
- Longer repayment terms available
- Competitive interest rates
Cons
- Higher credit score and annual revenue of $500,000 required
- Funding can take several days
- May require collateral
Additional Information
Interest Rates
Starting at 6.99%
Earliest Funding Time
5 to 7 business days
Minimum Requirements
Must be in business at least six months and annual revenue of at least $500,000
What Is a Business Loan?
A business loan is simply a loan intended for business purposes. These loans can cover a wide variety of needs, from real estate and equipment to purchasing inventory or making payroll. Business loans come in either secured or unsecured forms. A secured loan requires some sort of collateral, such as real estate or other assets. An unsecured business loan doesn’t require collateral, but it will likely require a personal guarantee and includes more stringent credit requirements because it’s riskier for the lender.
Types of Small-Business Loans for Women
A small-business loan can help women-led businesses with startup costs, operating expenses, real estate purchases or keep a steadier cash flow when there are decreases in revenue. But not all small-business loans look and act the same. Before you seek funding for your female-led business, it’s essential to understand the various lending options available, as one might be better suited for your business versus another.
- Term loans. Term loans offer a flexible funding solution since they can be used for a variety of business-related purposes. You can apply for a term loan through online lenders, banks or credit unions, but each lender has its own unique requirements for approval. Approvals are based on creditworthiness and often require a personal guarantee and a good to excellent credit score.
- Lines of credit. A line of credit is similar to a term loan as far as requirements go, but you access your funds differently. Unlike a term loan where you receive a lump sum up front and pay it back in installments, a line of credit allows you to withdraw funds as needed, up to the limit of your credit line.
- SBA loans. You can find U.S. Small Business Administration (SBA) backed loans offered through SBA-approved banks (the SBA doesn’t actually lend the funds). There are numerous lending opportunities through the SBA which offer large funding amounts, from $30,000 up to $5,000,000. Interest rates vary by loan type and lender but are typically competitive compared to other lenders on the market.
- Merchant cash advances (MCA). An MCA is an alternative form of short-term financing. The lender provides a lump sum amount up front in exchange for a percentage of the business’s credit card transactions until the loan is repaid.
- Invoice factoring. Invoice factoring is a similar concept compared to an MCA where you receive a lump sum payment up front from a third-party company. In exchange for the lump sum, you sell your unpaid invoices at a discounted rate.
Difficulties Women Face in Business Financing
Before 1974 and the passing of the Equal Credit Opportunity Act, women faced major uphill battles to access credit and qualify for loans on their own. Although 1974 marked the year it became illegal in lending and credit practices to discriminate based on gender and marital status, women still face numerous challenges today when seeking financing for their own businesses. These challenges include:
- Investor bias. Women only raise a fraction of what men raise with venture capital startups. According to 2022 PitchBook data, 16.1% of VC decision-makers in the U.S. are women. Further, a little under 2% of all VC funds were raised by women-founded startups in 2022—a major gap in investments for women-led businesses.
- Inadequate support system. Women may experience a harder time making connections (both in or out of their network) in order to access the same opportunities and funding as men. In addition to challenges with financial support, there may be a lack of emotional support in their lives to encourage starting a business.
- Industry. Many fields have become saturated, which can make it harder for women-led businesses to stand out. This can create challenges for revenue, which makes securing funding even more difficult.
How To Choose a Business Loan for Women
Choosing a business loan is a major decision for any business owner, but it can feel even more overwhelming if you’re unsure what to look for. Comparing multiple loan options and lenders is a smart way to see the various offerings available and if one option may be a better fit for what you need.
Interest Rates
Interest rates are what the lender charges you for borrowing money. There’s no set amount to look for when shopping around, but you’ll see a wide range of interest rates among various lenders. You’ll likely find short-term loans often have higher interest rates versus long-term options. Companies offering same-day funding and fast approvals often include higher interest rates too.
Other Fees
Interest rates may be the tip of the iceberg with some lenders’ costs, with some adding on fees that can make the loan cost skyrocket. You can request the fee information up front, but some lenders may charge application, origination, administrative or processing fees. Monthly fees might also be tacked on, and you may be hit with a prepayment penalty for an early loan payoff.
Repayment Terms
Not only is it essential to understand how many months or years it takes to repay the amount you’re borrowing, but how often you have to make these payments is another critical factor. Some lenders, especially those for short-term loans, require daily or weekly payments versus the typical monthly payment.
Funding Speed
If you need cash quickly, it may impact what type of lender you work with. While traditional banks and credit unions offer advantages such as in-person customer service and a variety of lending options, approval and loan funding can take days or weeks to get through. Non-traditional lenders, such as online options, can offer faster approval and lending times but typically include higher loan costs.
Frequently Asked Questions
How Do You Apply for a Women’s Business Loan?
Before applying, it’s essential you compare multiple lenders and options so you can find the ones offering the lowest rates with the terms that are most agreeable to your budget. You’ll apply for the loan by submitting an application and required documentation, which typically includes basic owner information, bank statements, tax returns and details about your business structure.
Where Can Women Get Small-Business Loans?
Women can apply for small-business loans through banks, credit unions, online lenders and nonprofit lenders. Each place has its pros and cons, with banks and credit unions usually taking longer for approval decisions but offering excellent in-person service. Online lenders typically offer quicker approval and funding but lack the personal touch you may need during the process.
Are There Business Loans Specifically for Women?
There are no business loans specifically for women because doing so would violate the Equal Credit Opportunity Act, which prohibits discrimination of borrowers based on sex or marital status. However, there are grants you can apply for that are specifically for women.
Editorial Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post. We may earn a commission from partner links on Newsweek, but commissions do not affect our editors’ opinions or evaluations.
