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When it comes to small business loans for women, knowledge is power.
Women are not new to entrepreneurship, but they sometimes face more roadblocks when it comes to raising the funds necessary to start a business.
If you’re a woman looking for information on how to start a business, especially raising capital, you’re in luck.
There are more programs for women than ever – offering everything from startup business loans for women, to small business grants for owmen.
Below we’ll cover all the resources available to female entrepreneurs, including the best small business loans for women, minority women-owned business grants, and any organizations out there that are lending a helping hand to women in business.
Raising cash is one of the biggest hurdles many women face when starting a business.
When you’re just starting out, it can be tough to convince a bank to take a chance on you.
That’s because an unproven startup is one of the riskiest gambles for a bank.
But the bank isn’t the only place to borrow money for your startup.
Learn more about Start Up Business Loans
Many people are unfamiliar with microfinance, but these special interest loans can be seriously helpful.
Microloans are mall by their very nature, so they work best for small businesses needing to borrow, say $7,000, not $70,000.
The good news is that microloan terms are generally favorable, with competitive interest rates, and some may include free access to business development resources.
Microloans available through non-profit organizations are worth a little digging around–
Especially if your business goals are aligned with the non-profit mission.
Continue reading for a list of non-profit micro loans and other financing options for women at the end of this post.
Another option is to take out a personal loan.
If you have good personal credit, but little-to-no business credit, this is a nice little workaround.
Personal loans can be used for any purpose, including for your business.
However, personal loans do tend to have high interest rates, much like a credit card, so use this option only if absolutely necessary.
For example, a personal loan might make sense if you need to purchase a computer or POS system – but not to finance an entire store’s worth of inventory.
If you have a personal credit score below 600, it will be more of a challenge – but not impossible – to borrow the money you need to start your business.
In fact, there are several companies that are happy to work with business owners with less-than-stellar credit, sometimes approving funds in as little as 48 hours.
The only drawback?
You’ll pay a lot more in interest since you’re viewed as a higher risk–
APRs may run as high as 25% to 99%.
Your best bet is to use these types of loans just long enough to get you up and running;
Don’t borrow a cent more than you need.
Once you’ve established your creditworthiness, you can consider refinancing or borrowing more at a lower interest rate.
Once you’ve made it past the one-year mark, you’ll find it easier to gain access to loans with more reasonable APRs –
Typically running between 9% to 25%.
Banks will also be more willing to work with you, especially if you can point to a solid payment history.
Another option to consider is peer-to-peer lending, where several investors work together to fund small businesses.
The interest won’t be as low as a traditional bank loan, but the lending criteria is less strict, making it a good option for businesses still striving to prove their creditworthiness.
Learn more about How To Get A Good Loan With Bad Credit
Once you have a few years and a well-established credit history under your belt, you’ll qualify for even better loan options.
In addition to banks, you might also want to explore the loan programs offered by the Small Business Administration (SBA.)
Most lenders work with the Small Business Administration in one form or another, whether it be the SBA 7(a) loan program, the CDC/504 loan program, the microloan program, the SBA disaster loan program, or some other loan program guaranteed by the federal government.
SBA loans can range anywhere from $5,000 to $5 million, and are perfect for women business owners looking to refinance high-interest loans, or invest more money in their business.
The APRs are very reasonable as well, typically ranging from 5.5% to 7.75%.
Learn more about Government Lending through the SBA
Loans are an effective way to raise capital for your company, but they aren’t the only option.
There are a variety of programs and organizations that provide resources to women and minority business owners through grants, education, support, and other awards.
Women-owned businesses may qualify for special grants to help spur economic growth.
The most appealing thing about federal small business grants is that, unlike loans, they won’t need to be repaid.
Don’t get too excited though, as the competition to secure free money from the government is fierce.
WomensNet offers tips for women on how to obtain grants.
They also have their own, The Amber Grant, a $500 grant which is awarded monthly.
One winner receives an additional $1,000 grant at the end of the year.
The Eileen Fisher Women-Owned Business Grant supports women-owned companies dedicated to creating environmental and social change and that are ready to expand their business: $100,000 in grants are awarded annually for up to 10 grant recipients.
The American Association of University Women supports women who have already attained a bachelor’s degree, but are preparing to either change careers, re-enter the workforce, or otherwise advance their career.
Zions Bank Smart Women Grants awards six $3,000 grants annually to entrepreneurs that are either focused on the empowerment of women, or that directly benefit women, low-income, or underserved populations in Utah and Idaho.
The Open Meadows Foundation provides grants to projects which benefit women and girls and promote gender, racial, and economic justice.
The Halstead Grant awards an annual grant to a new jewelry designer to help get their business up and running.
If all else fails, Grants.gov is a federal database listing all government grant opportunities.
Use the filter tools to narrow your search to find grants for small-business or grants for women.
This avenue is not a grant per se, but the InnovateHER Challenge is a national business competition that awards prize money to businesses that will impact and empower the lives of women and families.
We touched on the Small Business Administration and it’s many useful programs earlier…
The SBA Women’s Business Centers are a national network of educational hubs dedicated to reducing barriers for women entrepreneurs and assisting women in starting and growing small businesses.
Available through the SBA are several resources meant specifically for female veterans and military spouses.
This programs just received additional funding from the new head of the SBA.
Veteran Women Igniting the Spirit of Entrepreneurship, or V-WISE, is open to all women veterans, active duty female service members and female partners/spouses who share the goal of launching and growing a sustainable business venture.
Learn more about Small Business Loans for Veterans
The National Women’s Business Council is a non-partisan federal advisory council that serves as an independent source of advice and counsel to the President, Congress, and the SBA on economic issues that matter to women business owners. The NWBC also developed and moderates Grow Her Business, an entrepreneurship resource platform for growth-minded women entrepreneurs in the US.
Owned and operated by the National Women’s Business Council, Grow Her Business is an entrepreneurship resource platform built specifically for women in business. It’s an exhaustive resource for the woman on a mission.
Astia is a nonprofit organization dedicated to promoting high-growth female entrepreneurs by providing them with access to capital, business networks, and other opportunities.
WomanOwned connects women small business owners through an online community where they can market their services, find information on grants, and other funding sources.
Elizabeth Street Capital is an initiative spearheaded by Bank of America and the Tory Burch Foundation designed to provide entrepreneurial women with access to mentors, networking events, and even low-interest loans in some cases.
A rollover for business startups allows business owners to withdraw money from an eligible retirement account, such as a 401(k) or traditional IRA, and invest it in their business without paying early withdrawal penalties or income taxes.
The Union Bank Business Diversity Lending program is designed to make it easier for women and minority-owned businesses to qualify for the financing they need to grow their business.
The Minority and Women Revolving Loan Trust Fund Program makes low-cost financial assistance available to minority and women-owned businesses unable to receive funding through traditional financial services.
This Walmart program endorses and promotes products sourced from women-owned businesses with a certification through WBENC or WEConnect International.
Count Me in for Women’s Economic Independence is a national not-for-profit provider of resources, business education, and community support for women entrepreneurs seeking to grow their micro-businesses.
Ladies Who Launch provide inspiration and advice to women entrepreneurs via a network of more than 100,000 women, and a brand that reached millions through free events, workshops, expert advice, and books.
The Business Center for New Americans offers small business loans and micro loans to start or grow minority-owned small businesses.
Grameen America helps women living in poverty build small businesses by offering micro loans, training, and support.
Springboard Enterprises is an expert network of innovators, investors, and influencers who are dedicated to building high-growth, technology-oriented companies that are led by women.
The world’s oldest and largest organization representing franchising opportunities around the world, the International Franchise Association is packed with special programs to encourage franchising.
The Women’s Franchising Committee is just one of many initiatives developed to help entrepreneurs interested in franchising opportunities.
The Wisconsin Women’s Business Initiative Corporation is actually a non-profit organization which offers business classes and business loans of up to $250,000 for aspiring business owners in Wisconsin.
Phenomenelle Angels is an early-stage fund that invests in businesses in Wisconsin and the Midwest that are women and minority owned or managed.
RampCorp is a business accelerator in Texas that helps women launch scalable companies.
Entrepreneurs receive coaching from experienced investors, entrepreneurs, inventors, and business leaders.
One KC Women helps women in Kansas City find better employment opportunities, start a business, grow a business, or receive guidance in overcoming barriers to success.
The Startup Runway Foundation is hosting the Startup Runway Showcase and networking reception in order to give minority and women-led startups a chance at $10,000 in grant money.
Golden Seeds is an early-stage investment firm made up of investors whose goal is providing opportunities for women-led businesses.
Women’s Capital Connection is a network of accredited angel investors in the Midwest committed to investing in women-led businesses.
The Women’s Venture Fund is another nonprofit dedicated to helping women establish businesses in urban communities through funding and business development programs.
37 Angels only funds businesses with proof of concept.
Investments are not exclusive to women, though it is a female-founded firm.
The New Media Women Entrepreneurs project focuses on opportunity and innovation, as well as recruitment and retention for women in journalism.
It also provides seed funding for women-led news ideas.
Belle Capital is an early-stage angel fund that is focused on building up companies in underserved capital markets across the U.S.
Companies must have at least one female C-level exec or founder, or be willing to recruit experienced women to the C-suite and board of directors.
Plum Alley connects promising women entrepreneurs and gender diverse teams with investors aligned with their goals.
Between the empowering programs now available to women and the rapid pace at which technology is transforming the lending industry, it’s easier for women to access business capital than it was even 10 years ago!
Even if you don’t have a perfect credit history, it doesn’t mean you need to settle for a high-interest loan to fund your business.
There are programs out there that want to help you– Why not let them?
Before you even step foot in a bank, be sure to evaluate all the options available to support your business.
Learn more about Why Small Businesses Don’t Get Loans From Big Banks
Or, you might be just the right fit for a group of angel investors.
More than likely, your solution will come in the form of some combination of these sources of capital.