Best Small Business Loan Options for Women (2024)

Managing finances is challenging for business owners, but women entrepreneurs face additional hurdles like bias and limited resources. That’s why specific loan options targeting women-owned businesses are essential. These loans often come with favorable terms, mentorship opportunities, and business development centers to empower female entrepreneurs. We’ve gathered top financing options for American women entrepreneurs to kickstart your business journey.

Why loans for women are important

There is no shortage of traditional banks, credit unions, and financial institutions that offer loans to small businesses, regardless of who owns them – so why look for one specifically aimed at women?

Women face unique challenges in business

Female entrepreneurs may face specific challenges that their male counterparts don’t, and can benefit from these specific programs. Many of these challenges have to do with women’s backgrounds and the societal perception of them or how they may size up against typical lending requirements. For example, a woman who spent years as a stay-at-home parent may not have the work experience that a bank is looking for on paper – but that doesn’t mean she can’t be a successful entrepreneur.

They may be more tailored to small businesses

Many of these programs also help with potential roadblocks that any business owner could face. If you are looking for a smaller amount of upfront financing, for example, many large banks will not provide that specific loan amount and would prefer a very large loan. Or they may require a minimum credit score that is just not attainable for everyone. The loan programs aimed at women are often designed for small businesses and those who have never run a business before, making them a better fit for many people.

How to choose the best loan for you

There isn’t one loan or program that is going to fit the needs of every business, and the best one for you will be dependent on your situation and requirements to properly grow your business. However, there are some key factors to consider before choosing any loan.

Type of loan

Even among small business loans, each one can vary. You may hear about microloan programs, which function as a small cash infusion to get over a small hurdle or to test out an early idea, but they won’t be right for someone looking to make a huge investment upfront.  If you need a lot of equipment financing, for example, you may need access to more capital. Be sure that the loan you look at has goals that align with yours.

Many people assume all loans are a traditional, long-term loan with a fixed-rate, but there are many other funding options. A business line of credit, for example, could be another thing to consider if you may need more cash down the line. Find out how flexible the loan is and if it will meet your needs in the future as well as now.

Interest rates and fees

Whether you are seeking a business loan or a mortgage, interest is one of the most important things to consider. Small differences in these rates can be the difference between a manageable or unmanageable payment. You’ll want to understand what your monthly payment is when interest is included, if there is an early payoff penalty, and if the interest rate is fixed or variable.

In addition to interest, you’ll also want to consider the financial impact of fees. Take into account any activation fees, monthly fees, penalties, and other costs associated with the loan.

Source of funding

While it can be beneficial to work outside of the large, traditional institutions like a bank, you want to be sure your funding is secured. Always work with FDIC-backed institutions and ask about where funding is coming from. For example, some organizations use donations, crowdfunding, or peer-to-peer lending rather than providing the money themselves. You may also see venture capital used in many cases.

Perks of the institution

Like any business, you’ll want to be sure that the organization you choose is something you can work with well. An easy-to-use website for payments, questions, and paperwork is critical in today’s world. Often, the loan application itself will give you a sense for how well the platform works. You may also be able to get a sense for the customer service quality at that time.

It can also be helpful to know what else the institution offers so that you can keep financials consolidated. If you may want to refinance, take additional loans, open a line of credit, or conduct other activities, they could offer your benefits or deals to have everything in one place. You can also ask if they have business credit cards or cash advances available if you may want those.

All of these factors are important, but only you will know which ones matter most and how to make sure they mesh with your business. Below are some of our top choices for lenders that you can explore.

Check out our guide on Small Business Loans

U.S. Small Business Administration

This federal government agency was designed specifically to make sure that small business ventures throughout the country thrive, which they do by offering relatively low rates for any business owner and focusing on minority-owned businesses, including women, through SBA loans, specifically known as SBA 7 loans.

The best lending options for women in business

OnDeck

This lender is focused specifically on helping small businesses get started when their owners have a limited or poor credit history. With both loans and lines of credit, the business financing is backed by investors that provide funds to OnDeck, who then lends the money out to borrowers. To accommodate this model, interest rates are slightly higher than other lenders, but they do have some of the lowest fees in the industry. The flexibility and affordability make OnDeck an attractive option, especially to those who may be turned away for limited history at other institutions.

Kiva

Specializing in microloans, Kiva enables women entrepreneurs to crowdsource loans with zero percent interest. It provides a platform for women to share their business stories and connect with a community of lenders willing to support them financially. Additionally, Kiva’s global reach allows women entrepreneurs from around the world to access much-needed funds.

Accion

Unlike some other options that are for-profit, Accion is a non-profit organization that uses donations to fund microloans for women throughout the world. They use the funds from interest payments to run the rest of the business. This model means Accion can have more relaxed requirements for borrowers, and early-stage businesses can apply without endless documentation.

The interest rates may be slightly higher because of the additional risk they take on – but for easy applications and access, and respected customer service, this is a great option for brand new businesses and startups.

SmartBiz

SmartBiz is an online lender known for having some of the best interest rates available, which is a huge plus for many small business owners. With rates below the 9% mark in most cases, and loans as low as $30,000, the terms are exceptionally favorable. SmartBiz is a great option for more established businesses, as the application process is known to be long and tedious. But for the great rates and long repayment terms, this lender is a great fit for many women who may not be able to pay huge interest rates in the short-term.

Kabbage

For those seeking an easy-to-use, technologically savvy version of lending, Kabbage can be the answer. A 10-minute application process in their mobile app offers up fast access to working capital, and amounts up to $250,000 even for small businesses. Users are able to request their terms and work with personalized support. Interest rates and limited term lengths may mean the cost is higher for some businesses, but if you can find good terms, the user experience is unmatched.

Tory Burch Foundation Capital Program

Partnering with Bank of America, this program provides affordable loans to women entrepreneurs. The program offers financial resources and networking and mentoring opportunities to women in the early stages of their business. The Foundation also regularly hosts events and workshops aimed at enhancing business skills and leadership abilities for female entrepreneurs.

Women’s Venture Fund

Established to help women start and grow their businesses, this fund offers loans, consultation services, and training. The loans are particularly tailored for women who have difficulty accessing traditional forms of financing. The Women’s Venture Fund also conducts workshops and training sessions to equip women entrepreneurs with the necessary tools for business success.