Small Business Loans for Women (2024)

FAQs

How hard is it to get a small business loan as a woman? ›

Although women own 38% of all businesses in the U.S., according to the Women's Business Enterprise National Council, they often face obstacles when obtaining financing. In 2022, 25% of women-owned businesses were rejected for a loan, compared to 19% of male-owned businesses.

While getting a business loan can be difficult since most require strong personal and business credit scores, reliable cash flow and at least two years in business, there are alternatives available to obtain the cash you need.

If you applied for a business loan but were denied, you're not alone. According to the 2024 Report on Employer Firms, 22 percent of employer firms were denied business loans in the past 12 months. Another 28 percent were only partially approved.

In general, SBA loans are not as difficult to get as business bank loans. Because they're backed by the U.S. government, they're less risky for banks than issuing their own loans.

SBA loans are available to both men and women entrepreneurs. But women tend to seek funding at lower rates than their male counterparts due to the fear of getting rejected for the funds.

Microloans. Microloans are loans of up to $50,000 that can help startups tackle small funding needs. Because they are geared toward startup businesses, they may not have revenue requirements to apply. Microloans are available from the SBA, as well as other government, nonprofit and peer-to-peer agencies.

The most common reasons SBA loans are denied are poor credit, too much existing debt, or insufficient collateral. Other reasons include: Prior bankruptcy. Negative taxable income.

SBA Express loans, part of the SBA's 7(a) loan program, offer the easiest application process and the fastest approval times among all SBA loans. These loans, with payoff periods as long as 25 years, are designed for purposes such as refinancing debt, buying equipment, or improving real estate.

A formal business structure can help make getting approved for a business loan easier than a sole proprietorship.

Common reasons for loan rejection are not having a long track record in business, deteriorating business conditions in the industry where you operate and poor cash flow. If the lender is concerned about something you can control, correcting the situation and then reapplying may be the best course of action.

Why do I keep getting denied for a small loan? ›

Income and the amount of debt you already have can also be reasons a lender may reject your loan application. You can improve your chances of getting approved by increasing your credit score, getting a co-signer, or providing collateral.

SBA-qualified lenders usually set their own criteria when assessing your eligibility. Most lenders will require a minimum FICO score of 620 or higher for their SBA Loans.

In general, eligibility is based on what a business does to receive its income, the character of its ownership, and where the business operates. Normally, businesses must meet SBA size standards, be able to repay, and have a sound business purpose. Even those with bad credit may qualify for startup funding.

Yes. Some lenders welcome business owners with credit scores as low as 500. These loans focus less on your credit score and more on the strength of your business and your ability to repay the loan. Most business loans for bad credit will have high interest rates and fees.

Percentage of guaranty

For most 7(a) loan programs, SBA guarantees up to 85 percent of loans of $150,000 or less, and up to 75 percent of loans above $150,000.

Women-owned small businesses can also take advantage of SBA loan programs. Our partners offer advice and counseling to help choose the right path for your company.

SBA-qualified lenders usually set their own criteria when assessing your eligibility. Most lenders will require a minimum FICO score of 620 or higher for their SBA Loans.

What exactly was going on before this Act passed? Prior to the passing of this Act in 1988, women were required to have a male relative as their co-signer on business loans. The definition of “male relative” could range from a woman's husband to her own child.