Small Business Loans for Women

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The Best Small Business Loans for Women

In today’s changing economy, women are making a name for themselves as entrepreneurs, thanks to a cultural shift to level the playing field for women entrepreneurs. However, the dream to own a business for women is just the beginning. Small businesses owned by women are a rapidly growing segment of the economy with increased competition. Women entrepreneurs are not immune to the difficulties of running a business. Being successful requires patience, dedication, and hard work, but most importantly, the financial reserves to set the wheels in motion.

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National Women’s Business Council (NWBC) Fact Sheet

• Total Number of Female Only Owned Businesses: 9,878,397
• Percentage of total Owned Businesses:  36.3% Female Owned
• Employment totals from Women-Owned Businesses: 8,431,614

You can view the full report here.

AdvancePoint Capital specializes and has the products and services for acquiring business loans for women-owned businesses. Small business financing is no easy task, regardless of your gender. Finding women’s business funding programs specifically for women’s small businesses is something we know a thing or two about here at AdvancePoint Capital.

Are There Special or Unique Women-Owned Business Loans?

The SBA (Small Business Administration) has designated different loan programs specifically for women entrepreneurs. The SBA are not online lenders, but the Office of Women’s Business Owners (OWBO) sets out guidelines and rules similar to most other business loans followed by approved SBA lenders. To qualify for these women’s business programs, borrowers will have to demonstrate to approved SBA lenders good to excellent personal credit and a solid business plan that provides confidence in the approved lender’s ability to lend and provide funding.

The 10 Best Business Loan Options for Women-Owned Small Businesses

1. SBA Small Business Loans for Women

The SBA helps women entrepreneurs launch new small businesses and compete in the marketplace. SBA Loans are business loans backed by the SBA, which provide guarantees to the issuers (approved lenders by the SBA) of these loans in case of default. They are not a lender but sets the guidelines, qualifications, and requirements of SBA loan products. SBA loans are an excellent product for larger amounts of capital that require long-term financing.

SBA guidelines and qualifications are stringent and do require significant paperwork. Unfortunately, SBA loans are more challenging to get approved for, and they are not a quick fix; these loans will need time to process before you get an answer. Typical time frames range from a week to as long as a month. The rates and terms are desirable and highly sought after by women small business owners. AdvancePoint Capital has access to some of the largest approved SBA Lenders in the U.S.to provide funding. A robust business plan is required.

How to Choose the Right SBA Loan Options

These three programs are considered to be the most popular SBA loan options:

The 7(a) Loan Program – The 7(a) loan is the most popular choice for small businesses looking to access working capital or startup their business.

The Small Business Microloan Program – With the Microloan, small businesses receive small loans of up to $50,000 to run their company.

The CDC/504 Loan Program – This program provides long-term, fixed-interest rate financing to small businesses trying to expand or modernize.

Product Overview

Rates: Interest rates 5.5% or treasury index plus 1% to 2.50%.
Terms: 2 to 25 years depending on product
Fees: Origination fees range from 0% to 3%
Payments: Monthly
Credit Standards: Must have good to excellent credit.
Processing Time: 1 week up to a month

Small Business Administration Benefits and Best Uses

SBA loans offer attractive small business loan terms because of the length of duration and low rates. The SBA loan terms allow for larger amounts to fund big projects and business expansion.

(New) SBA Paycheck Protection Program (PPP) – The SBA has established the SBA Paycheck Protection Program loan in response to the recent pandemic. This SBA relief option provides small business loans for women to small businesses affected by the crisis and needs financial help. Under the right conditions, this SBA loan offers forgiveness. This SBA loan was designed for small businesses to retain employees and protect jobs during the pandemic. SBA Approved lenders provide funding for this program. You must meet specific annual revenue requirements to qualify for funding.

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2. Business Line of Credit for Women-Owned Businesses

A business line of credit is an open revolving line of credit that allows small business owners to draw funds when needed on-demand or make purchases up to a certain limit. This financing product is not open-ended forever and requires renewal either semi-annually or annually to be extended.

Product Overview

Rates: Interest rates start at treasury index plus 1% to 2.5%
Terms: Open revolving line
Fees: Origination fees range from 0% to 3%
Payments: Monthly, bi-weekly, or weekly payments
Time in Business: 2 years in business or more
Credit Standards: All credit considered.
Documentation: Standard documentation, including a 1-page application and 3 months bank statements; sometimes financial will be required depending on the limit.
Application Processing Time: Same day to up to a week depending on the lender

Benefits and Best Uses

Flexibility is the #1 reason why women-owned businesses choose business lines of credit. The ability to draw funds on demand at any time up to the limit is invaluable. This function allows female entrepreneurs to respond to cash flow, access working capital, or solve emergencies in real-time on-demand.

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3. Long Term Business Loans for Women-Owned Businesses

Long-term business loan offerings have become more prevalent with the emergence of Fintech Online Small Business Lenders. The new types of online lenders and alternative lenders use data and algorithms to access loan funding. Long Term loans are defined as terms over two years in duration. Rates vary greatly and typically start at the Treasury index plus 1% to 2.5% (6.50% currently) and go up to as much as 28% based on the business’s creditworthiness and financial condition. Documentation requirements will be lengthy and need to be detailed to qualify and get approved, as the rates and terms are attractive. Application approval rates with these term loans range from 15% to 25%, so only healthy and profitable businesses get approved. Overall qualifications are more stringent than short-term small business loans for women.

Product Overview

Rates: Interest rates starting at treasury index plus 1% to 2.5%
Terms: 2 to 5 years, in rare cases up to 10 years
Fees: Origination fees range from 1% to 3%
Payments: Monthly or bi-monthly
Time in Business: 2 years in business or more
Credit Score: Must have an excellent and deep credit history

Benefits and Best Uses of Long Term Small Business Loans

Long-term small business funding has excellent rates, fair terms, and low fees. The use of the money can be used for various purposes, such as business expansion or working capital.

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4. Short Term Business Loans

Short-term small business loans for women are defined as business term loans with a fixed lump sum (a specified amount) offered upfront, with a set payback amount over a fixed term of typically 6 to 18 months. When you cannot qualify for more traditional small business loan funding products, short-term business financing can be a great alternative. Rates are based on factor costs and not principal & interest and cost more than traditional small business loans for women. The good news is this business funding product requires very little paperwork, and requirements are much more forgiving than conventional small business loans for women. While a traditional lender may make approval for working capital loans like short-term lending, as a female entrepreneur, online lenders like Advance Point Capital provide these low cost business loans to grow your business.

Product Overview

Rates: Factor rates starting at 1.10% up to 1.45% of the funding amount
Terms: Typically 6 to 18 months
Fees: 1% to 5% origination fees
Payments: Weekly, bi-weekly, monthly, and in some cases daily Monday-Friday ACH payments
Time in Business: 1 year in business or more
Credit Score: All credit considered from poor to excellent
Special Features: Fast process and funding. Approval of financing can be the same day to 24 hours

Benefits and Best Uses of Short Term Business Loans

Short-term business funding can come to the rescue for businesses that need the money now and can’t get approved for more traditional small business loan products. You DO NOT need to prove the use of funds.

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Short-Term Loans

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5. Business Cash Advance

Business cash advances (BCA), also known as a purchase of future sales agreement, can advance future sales at a discount to a business. The business is responsible for paying back a fixed payback amount (also known as the specified amount), the difference between the advance amount and the specified amount called the “factor rate or cost.” These are not principal & interest costs, but instead, it is a fixed cost. A fixed percentage of future overall sales deposits called the specified percentage is the method used for repayment.

The payments are collected by an ACH fixed daily or weekly payment deducted from a business bank account based on the specified percentage of future sales. Reconciliation can occur at the end of every month. If the fixed payments taken are more than the set future percentage of sales, a business owner can request a refund to the business for the overpayment. Then, the set specified percentage of sales collected for the business will match the sales volumes. There is no term limit with advances because the specified percentage of payback never changes, yet future sales can change or fluctuate.

Product Overview

Rates: Factor rates from 1.09% up to 1.45%

Terms: No term limits. Payments continue until paid in full based on specified percentage collection method and are dependent on future sales
Fees: Origination Fees that range 0% to 5%
Payments: Weekly or daily Monday-Friday Fixed ACH payments
Credit Scores: Poor to excellent credit accepted. No minimum credit score requirements.
Time in Business: 6 months in business or more
Documentation: Reduced documentation. 1-page application and 3 months bank statements are all that is required.
Funding Processing Time: Same day to 24 to 48 hours from application to funding.

Benefits and Best Uses of Business Cash Advance

A business cash advance is a great alternative when more traditional business funding options are not available. Working capital to improve cash flow is the primary use of funding.

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6. Merchant Cash Advance

A merchant cash advance (MCA) is also known as a purchase of future sales agreement, which operates very similarly to BCAs. The most significant difference is the repayment process, which is connected to future credit card sales instead of overall sales. This financing option is prevalent for women-owned small businesses that accept credit cards from customers regularly.

Product Overview

Rates: 1.09% up to 1.45% Factor rates
Terms: No term limits (payoff depends on future credit card sales)
Fees: Origination fees range from 0% to 3%
Payments: Fixed percentage of future credit card sales as payment
Credit Scores: All credit considered from poor, fair, good, or excellent.
Time in Business: 6 months in business or more
Documentation: Reduced documentation. 1-page application, 3 months processing statements, and 3 months bank statements are all that is required.
Application Process Time: Same day to 24 to 48 hours

Benefits and Best Uses of Merchant Cash Advances

Women entrepreneurs love the versatility of the repayment process that allows businesses with predominantly credit card sales to better control cash flow and profit margins versus a fixed payment, which has no flexibility. Working capital and cash flow are the most popular uses of merchant cash advance funding.

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7. Business Equipment Loans for Women-Owned Businesses

Equipment financing is used for the purchase of equipment, machinery, and other business assets, securing the equipment as collateral. Small business owners need to have very good to excellent credit to acquire equipment funding.

Product Overview

Rates: Factor rates 1.09% up to 1.45%, Interest 7%-28%|
Terms: 2 to 10 years
Fees: Origination fees range from 0% to 3%
Payments: Monthly fixed payments
Credit Scores: Good to excellent required
Documentation: Low documentation. 1-page application and invoice for equipment
Time Frame: Instant funding, same day up to 3 days depending on the lender

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8. Invoice Financing for Women-Owned Businesses

Invoice financing allows business owners to receive payment on their invoices quicker than waiting for terms to be paid by their clients. Invoice finance companies advance the outstanding balance to a business owner in exchange for a nominal fee for the delay in payment from clients who don’t affect cash flow.

Product Overview

Rates: None
Terms: No term limits
Fees: 1% to 2.5% fee based on Invoice. Monthly Service fees may apply depending on the volume of invoices factored
Borrower Credit Scores: The credit of the client needs to be favorable, NOT the business owner advancing off invoices
Documentation: Reduced documentation. 1-page application and roster of clients and current accounts receivable aging report
Processing Time: It takes 1 to 2 weeks to set up a new relationship to have the ability to fund invoices daily.

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Invoice Financing

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9. Purchase Order Financing for Women-Owned Businesses

Purchase Order financing offers businesses the ability to raise funding to pay suppliers upfront for verified purchase orders. Purchase order loans will finance an entire order or a portion of it, depending on the purchase order funder. When the supplier is ready to ship the order, the purchase order funding company collects payment directly from the customer. The purchase order funder will subtract their fees and then send the balance of the invoice.

Product Overview

Rates: None
Terms: No term limits
Fees: 1% to 3% fee for each purchase order.
Borrower Credit Standards: All parties need favorable history but all credit considered
Documentation: Purchase order samples and owner information for all parties involved in the transaction.
Processing Time: 1 to 2 weeks to set up, then you can fund purchase orders daily

Benefits and Best Uses of Purchase Order Financing

Purchase order financing is used to support the entire distribution chain with capital, so women business owners don’t have to tap into existing cash flow.

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10. Business Credit Card for Women-Owned Businesses

A business credit card operates just like personal credit cards in that they are open lines of revolving credit that offer principal & interest rates with a set credit limit. A card is issued that can be used for making payments or purchases. It is not uncommon for business owners to utilize business credit cards as well as other business financings as an overall toolbox of options approach to funding a business.

Product Overview

Rates: Introductory rates starting at introductory rates of 0% up to 28.99% 
Terms: Open revolving line of credit with a set credit limit 
Fees: Annual fees range from $0 to $500
Payments: Flexible monthly payments
Credit Standards: Must have good to excellent credit and deep credit history
Documentation: No Documentation for smaller amounts $3,000 up to $15,000. Larger credit limits may require documentation 
Processing times: Instant approval to same day available

Benefits and Best Uses of Business Credit Cards 

This business financing product is an open revolving line of credit that has the ability to draw money, make payments, and make purchases using a card.   

How Do I Qualify for a Small Business Loan For Women?

Qualifying for small business loans for women entrepreneurs requires knowledge of what resources are available in the financing marketplace specific to women business owners in search of a small business loan for women. Preparation and understanding are essential to get the best small business funding product to meet your needs.

5 Steps to Secure Loans for Your Women-Owned Business

  • Identify need.
  • Do your own research for resources with online business loans.
  • Work with a small business loan originator with a wide variety of knowledge with specific business financing options and women business owners’ resources.
  • Prepare required documentation for the application process.
  • Shop, Compare, and you will save yourself a lot of time and money.

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Advice and Tips for Women Business Owners When Searching for Small Business Loans

Women entrepreneurs have more opportunities than in years past to access the American Dream of self-employment and business ownership. Setting aside being a woman for a moment, when searching for a business funding product, it always should start with asking the question, why and what are you using the money for? Are you looking to work on a large project that requires long-term repayment? Did you use a cost versus benefit analysis? Have you looked at all other financing options and determined what the best options are?

In many cases, the answer to these questions may dictate what business loan product you will choose and drive you to determine the best financing product. Your choice should not be just based on rates. You need to balance the costs, terms, payment frequency, and product flexibility when making the best choice for your women-owned business.

How to Apply for Business Loans for Women-Owned Small Businesses

AdvancePoint Capital offers an effortless experience for small business loans for women that can help answer any questions you may have. Experience our products and services. Our women customers who own small businesses love the fast, streamlined application process and high approval rates that come from working with online lenders like us.

Applying for small business loans for women with AdvancePoint Capital is as simple as a 1, 2, 3, 4 process. Small businesses start with this online form, fill out the short loan application page, wait a few hours for your approval, and then get your money!

The fast, convenient, and straightforward way to get the money you need for your small business – now!

Get your quote today by filling out our simple form.