Start-up Business Loans for Women

As women entrepreneurs gain prominence and their share in the world of entrepreneurship surges, financial institutions have been throwing in money supporting the growth of female-run businesses in a bid to better serve their communities. 


Loans for women business owners are increasingly available as banks and other lenders realize that women-owned businesses comprise an important segment of the small business market. In recent years, the federal government has been proactive in encouraging lending institutions to increase funding for small businesses – many of which are started by women.


So, where can you find these loans? This article will walk you through all you need to know about start-up business loans for women and point you to the most viable lenders. Stick around. 

  • Interest
  • Min Credit Score
  • Amount
  • 4.25%
  • 560
  • $1,000/$5,000,000
  • 4.8%
  • 530
  • $5,000/$5 million
  • 4.66% draw fee
  • 600
  • $1,000/$150,000
  • APR range
  • Fees
  • Terms
  • Amounth
  • Unemployment protection
Bank 1
  • 6.95%–35.89%
  • Up to 5% transfer fee
  • 3–5 years
  • $1,000–$40,000
  • No
Bank 2
  • 6.95%–35.89%
  • Up to 5% transfer fee
  • 3–5 years
  • $1,000–$40,000
  • No
Bank 3
  • 6.95%–35.89%
  • Up to 5% transfer fee
  • 3–5 years
  • $1,000–$40,000
  • No

Table of Contents

How Start-up Business Loans for Women Work?

These types of loans are designed specifically to help women who want to start a business. These can be used as working capital for daily operations and everything from paying bills and inventory costs to equipment and expansion.


Start-up business loans for women work the same way as regular small business loans, except that they’re easier to get. Apart from going through banks or other financial institutions, however, the funds are also sourced from a variety of places including private investors and venture capital firms.


Typically, start-up businesses receive smaller amounts of financing than established companies, in part because the risks are perceived to be greater. But it’s not unheard of for start-up businesses, particularly those with a novel concept or technology, to receive sizable loans in the hundreds of thousands of dollars or more.


As a general rule, start-up business loans can be used for any purpose—to begin operations or expand existing projects. Start-up business loans have a relatively short repayment period and tend to have lower interest rates than other types of credit. Some programs even offer no interest.


They may be provided by local organizations, non-profits, or federal initiatives. While these loans are not specifically reserved for women, they are aimed at helping female entrepreneurs succeed in the field of business ownership.


Recognizing that women are less likely to apply for start-up business loans than men, some lenders have made an effort to prioritize female applicants or provide targeted outreach to female entrepreneurs. Other lenders may not advertise at all but simply focus on providing the funds that women need to get their business plans started.

Hot Tip:

Start-up business loans have a relatively short repayment period and tend to have lower interest rates than other types of credit.

Requirements to Qualify

Many different types of start-up business loans are available through a variety of organizations. The specific requirements will vary by lender, but there are some general guidelines that most private lenders follow.


Typically, women must be at least 18 years old to qualify for these types of credit arrangements. They may not have any credit history or experience running their own business. 


Some lenders will consider a woman’s individual credit score as the primary indicator of her ability to repay a start-up loan, while others may look at overall household income or debt load.


In order to apply for these loans, women must have a business plan that details how they’re going to use the money to achieve their goals and expand their operations. 


Women who already have startup capital available to them tend to be less likely to qualify since they are perceived as having fewer financial limitations than women who need to borrow money in order to start or grow their businesses.


Start-up business loans for women may also require the woman entrepreneur to sign a personal guarantee. This means that she promises that she or a family member will be responsible for the repayment of the loan if the business fails to make payments as expected.


In summary, the following types of women are typically eligible for start-up business loans:

  1. Women who have been denied funding from a traditional lender 
  2. Women with limited credit history 
  3. Women who have little to no business experience 
  4. Women who do not yet own a home or car or property they can use as collateral 
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Types of Start-up Business Loans for Women

Lenders offer a variety of start-up business loans for women. The following are a few examples:

1. Merchant Cash Advance 

A merchant cash advance is a short-term loan intended to help businesses get through the holiday season. The borrower receives an agreed-upon amount of money in exchange for future credit card sales. In some cases, the borrower may also have to share a portion of their daily or monthly sales volume with the lender. The loan is repaid when, and only when, the borrower’s income exceeds the amount owed to the lender.

2. Peer-to-peer lending 

If you have an individual credit score over 720 and good business credit, peer-to-peer lending is a good option for getting the funds you need quickly. As of this writing, Lending Club and Prosper are two popular peer-to-peer lenders that provide loans to women-owned businesses.

3. SBA Loans 

The U.S Small Business Administration (SBA) provides start-up loan programs designed to help women get their businesses off of the ground. Currently, there is no extra benefit for women who apply for these loans, but some lenders (particularly community banks) do focus on connecting female entrepreneurs with SBA opportunities.

4. Microloans 

Microlending programs are intended to fund small businesses that have yet to establish a solid credit history or track record. In order to qualify for a microloan, you’ll need at least three years of business management experience and a detailed plan explaining how you will use the loan to meet your business goals. Most lenders require that women have an individual credit score over 700, along with good personal credit history.

5. Traditional Lenders 

You can also apply for start-up business loans with traditional lenders like the bank or credit union where you already have an account. These types of loans tend to be worth $25,000 – $100,000 and are often designed to fill the gap between what you can afford and what your business needs.

Startup Business Loans for Minority

  1. Minority Business Loans – If you are a minority woman applying for start-up business loans in the United States, there are several government agencies in your corner. The Small Business Administration (SBA) provides grants and loans specifically designed to support minority-owned businesses. There is also an SBA program called “8(a)” which helps minority businesses to compete for government contracts.
  2. Minority Bank Loans – Some banks are now targeting minority women entrepreneurs, offering business loans specifically designed to meet the unique needs of minority women. 
  3. Government Grants – The SBA also administers a number of grants that are aimed at helping minority women get their businesses off the ground. For example, the SBA offers a grant program known as “Emerging Leaders” which provides funding for women-owned businesses in need of capital. If you are a minority woman looking to start or expand your business, check with the agency that governs your type of business (such as the U.S Small Business Administration) to learn more about the available loan and grant programs.
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SBA Small Business Startup Loans for Women

The SBA provides a number of loan and grant programs for women who want to start small businesses. Many of these programs focus on helping women overcome common obstacles to starting a business, such as lack of collateral or money for initial start-up costs. Some loans target specific groups, including female entrepreneurs with physical disabilities and those seeking to launch green businesses.

A sampling of SBA loans for women include:

1. Microloans – Microloan programs provide small, short-term loans that can be used to purchase business supplies and equipment, hire employees and contractors and complete project-based contracts. The SBA does not provide microloans directly; instead, they partner with intermediary lenders. This type of loan is designed for women with established business plans who may not have access to traditional financing options.

2. Women’s Business Centers – The SBA offers grants to organizations that partner with at least one community-based Women’s Business Center (WBC). WBCs are typically located in regions where the SBA has a greater focus on helping women-owned businesses. Grantees use this funding to provide support services, such as business plan development and marketing assistance, to the female entrepreneurs they serve.

3. Encore Capital for Women’s Business Loans – Entrepreneur magazine ranked Encore Capital as one of the top ten lenders for women . The company offers a variety of financing options to women who are interested in starting or growing their businesses. Encore Capital is an SBA 7(a) lender, so they have competitive rates and flexible repayment schedules for start-up businesses.

4. Women’s Business Loans – The Office of Women’s Business Ownership offers two programs that can help you get started with your business:

a) Women’s Loan Program – The goal of this program is to help low-income women overcome the challenges they face in getting business loans. To qualify, you must be a woman living in an eligible rural or urban area who has been denied traditional financing options at least twice. You must also have either limited access to credit or personal assets worth less than $150,000.

b) Women’s Self-Employment Program – This program is for women who want to start a business but have no access to credit. You must have limited income and assets, as well as the ability to document your idea or plan through financial records or other means. In exchange, you commit to keeping your business open for a minimum of three years.

5. Support Services: In addition to traditional loans, the SBA offers several training and technical assistance programs that focus on specific areas of business development. These services include counseling for women’s business owners, as well as seminars on topics such as small-business management and financing options. Each state’s SBA office is responsible for determining the eligibility of applicants and awarding grants.

Hot Tip:

The SBA provides a number of loan and grant programs for women who want to start small businesses.

Benefits of Startup Business Loans for Women

Start-up business loans for women provide the capital needed to launch a new business venture. Rather than seeking a loan from a bank, many women entrepreneurs prefer to apply for an SBA-backed loan, which comes with greater flexibility and lower interest rates. The benefits of these loans include:

  • Lending options tailored to specific industry needs –  The SBA works with banks and other lenders to provide loans for specific business needs. For instance, women interested in opening a childcare center may be able to apply for an SBA loan that funds the purchase of playground equipment or related supplies.
  • Flexible repayment schedules –  Startup business loans for women are generally low-interest, short-term loans. As a result, the repayment schedule is typically fast – usually over one to three years.
  • Access to training and resources – Startup business loans for women often come with access to mentoring services, workshops, conferences and other resources designed specifically for female entrepreneurs. Taking advantage of these services can help new business owners establish sound business practices, avoid common mistakes and build for the future.
  • Greater likelihood of approval, given the lower default rate among SBA loan recipients –  only 2.5% of SBA-backed loans filed for bankruptcy in 2013, according to the SBA .
  • Lower interest rates and longer repayment schedules than some other business loans –  SBA 7(a) loans have an average interest rate of 6% and repayment terms of five to seven years.
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Frequently Asked Questions (FAQ)

No. There are ways for women-owned businesses to get a loan without all of the hassle, and one option is through SBA loans!

Yes. SBA loans, Peer-to-peer lending, merchant cash advance and microloans are some of the options you could explore.

Through loans from traditional lenders, grants, savings, donations from family and friends and government and private institutions.

While there are no hard and fast rules, generally speaking, applicants must be in business at least one year, show that their businesses have a reasonable chance of success and possess the management skills needed to run their operations. They also need to meet specific financial eligibility criteria based on gross annual income.

SBA Express loans can be approved and disbursed within seven days; other types of loans typically take four to six weeks, according to the SBA .

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