Business Loans for Women
There are a number of financing options for female entrepreneurs to consider. These include credit-card financing, small business grants, crowdfunding opportunities and equity investments from angel investors and venture capital firms. But debt financing is usually the most accessible option for most small businesses.
Regardless of the type of business financing you choose, make sure to research the options thoroughly before applying. The best financing options for women will often be those that provide flexible requirements and personalized assistance in addition to the funds they are providing. This can help you avoid the frustration of spending weeks or months on an application that is ultimately denied or requires you to give up a significant amount of equity in your company.
Women-owned businesses continue to grow and prosper despite the challenges they face in obtaining funding. The gender gap in business financing remains stark: According to the Federal Reserve, 25 percent of women-owned businesses had their financing applications rejected by lenders in 2021 compared to 19 percent of male-owned businesses.
While these figures are disheartening, there are many organizations dedicated to helping women-owned businesses overcome their financing obstacles. One such organization is Lendio, which offers an online application that connects you to a marketplace of lenders. The platform also includes resources and tips specifically geared toward women-owned businesses.
Another great resource for finding business loans for women is a community-based lending organization like a local credit union or a microlending institution. These types of financial institutions are well-versed in the needs of their communities and are able to provide more tailored lending services that fit your specific business. Additionally, they typically offer lower interest rates than traditional banks.
In addition to the lending options mentioned above, there are also several women-focused grant programs and loan guarantee programs. These programs are specifically designed to provide financing for women-led businesses and are usually backed by private donors or government agencies. Women-centric grant programs are usually a great option for early-stage companies that need a relatively low amount of capital.
Other financing options for women-owned businesses include short-term and long-term business loans, as well as lines of credit (LOCs). Short-term business loans can range from three to 18 months and are a good option for women who need working capital to keep their company running. Long-term business loans, on the other hand, are more for a fixed term and are generally used to finance larger purchases such as commercial equipment or a point of sale system. Lastly, LOCs are similar to business credit cards in that you can borrow up to your limit and pay only the interest on the outstanding balance.