Best Business Loans For Women Of 2024

We reviewed 19 popular lenders based on 16 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the best lenders based on the weighting assigned to each category:

• Loan cost: 35%
• Loan details: 25%
• Customer experience: 20%
• Eligibility and accessibility: 10%
• Application process: 10%

Within each major category, we also considered several characteristics, including available loan amounts, repayment terms and applicable fees. We also looked at minimum credit score and time in business requirements and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like online applications, prequalification options and mobile apps.

Where appropriate, we awarded partial points depending on how well a lender met each criterion.

To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our Loans Rating & Review Methodology.

Consider these tips when comparing business loans for women:

• Where possible, prequalify. Some business financing lenders offer a prequalification process. This means prospective borrowers can share details about their financing needs, revenue and other relevant information to find out what loan amounts, rates and repayment terms they may qualify for. This process typically only requires a soft credit inquiry, which has no impact on your credit score.
• Determine how you want to receive your funds. Two of the most common ways you can receive and access your business funds are through a lump-sum payment or on an as-needed basis. If you want to receive your funds up front, choose a traditional working capital or term loan. However, if you want to use funds only as you need them, consider a business line of credit.
• Consider the repayment terms and flexibility. Each business financing lender has its own repayment structures. While some types of financing require monthly payments, others may require daily or weekly payments. Take this into account when choosing your preferred lender and business loan.
• Look out for additional fees. Some lenders offer fee-free business loans that don’t require borrowers to pay origination fees, late payment fees, prepayment penalties or any other common loan costs. However, this is not always the case. Be sure to confirm a lender’s fee structure when shopping for the best terms. Factor in additional fees into your decision-making process.
• Evaluate the lender’s customer support options. If you’ve found a lender that’s prepared to offer the money you need at acceptable terms, consider the lender’s support options before signing the loan agreement. Customer support can make a huge difference down the line if you encounter issues with repayment. Research the lender’s customer service resources and read reviews to make sure it’s a good fit.

Small business loans can help women get their businesses off the ground and grow them into thriving enterprises. These are the most common types of small business loans for women and other business owners:

SBA Loans

U.S. Small Business Administration (SBA) loans are offered through a number of SBA-backed banks, online lenders and other financial institutions. Depending on the type of loan, available amounts range from $30,000 to $5 million, with interest rates varying by loan type and lender. Many SBA loans target startups and borrowers in underserved communities, as well as women- and minority-owned businesses.

SBA Microloans

The SBA’s Microloan program helps new businesses get off the ground. Loans are smaller than other SBA loans (up to just $50,000), but they’re often easier to qualify for businesses with limited financial records or credit history. Terms vary by lender but generally extend up to six years, and interest rates typically range between 8% and 13%.

Term Loans

A term loan is a traditional loan wherein a borrower receives a lump sum of cash that must be repaid over a set period of time (usually three to 24 months). These loans are available from banks, credit unions and online lenders, but they can also be obtained from peer-to-peer lenders—which allow individual investors to work directly with businesses in need of financing.

Term loans may be limited to use for certain purposes—such as financing inventory or other large purchases—but they are generally a flexible borrowing option for business owners who need access to a large amount of cash. Typically, term loans are available up to around $500,000, with annual percentage rates (APRs) starting around 9%.

Lines of Credit

A line of credit is a specified amount of money a business owner can access on an as-needed basis. If a portion of the line of credit is paid down early, the borrower can reuse those funds. When the draw period ends (usually in up to five years), the repayment period begins and the borrower can no longer access the revolving funds.

Borrowing limits are often between $2,000 and $250,000, and borrowers are charged an APR of 10% to 99%. Notably, however, interest is only charged on the portion of the line of credit that is actually used—not the entire available balance. This makes lines of credit perfect for business owners who prefer to access cash on an as-needed basis rather than all at once.

Asset-based Financing

An alternative to unsecured loans, asset-based financing lets businesses take out loans that are secured by valuable collateral, like accounts receivable, machinery and equipment, inventory and real estate.

This type of financing poses less risk to lenders because they have the ability to repossess the underlying collateral if the borrower fails to make on-time payments. As such, lending qualifications may be less stringent and interest rates more competitive—making it a good option for business owners with poor credit or limited credit history.

Invoice factoring is a common type of asset-based financing that involves selling a business’ outstanding invoices to a factoring company in exchange for a lump sum of cash—usually between 80% and 90% of the total invoice amount. Purchasing equipment with manufacturer financing and financing inventory directly through a vendor are other popular examples of asset-based financing.

Merchant Cash Advances

A merchant cash advance—or MCA—is a type of financing that lets business owners receive a lump sum cash payment in exchange for a portion of future sales receipts. Rather than making monthly payments like with traditional loans, MCAs are repaid via the business’ individual sales or through daily or weekly automatic clearing house (ACH) payments, usually at a factor rate between 1.2 and 1.5.

MCAs are often available through merchant service companies, which further streamlines the application, funding and repayment process. For that reason, this type of funding may be a suitable option for businesses with a high volume of sales.

The process of applying and getting approved for a business loan varies by lender and the type of financing. In general, though, prepare for the application process by checking your personal credit score and business credit score. Some lenders offer a prequalification process that can help you estimate how much you’re likely to qualify for; this also is an effective way to compare lenders and shop for the best rates.

Women and other borrowers should consider these factors when choosing a business loan:

• Lender reputation and offerings. Before applying for a business loan, read each lender’s online reviews to identify any red flags or potential issues. If you’re working with a local bank or credit union, or intend to apply for a grant tailored to women-owned businesses, check with other business owners and previous grant recipients to evaluate each option.
• Qualification requirements. Minimum qualifications vary by lender, but most traditional loans require a minimum personal credit score of at least 680. Lenders may also check the borrower’s business credit score if the company has been operating for a minimum of six months—though more time is usually required to build a business score. Check your personal credit score early in the borrowing process and then compare lenders based on score requirements.
• Available loan amounts and rates. Business financing amounts vary by lender and loan type, so evaluate your business’ needs before shopping for—and choosing—a small business lender. Likewise, APRs range from 5% to 99% depending on the lender, with the most competitive rates reserved for the most creditworthy applicants.
• Additional costs. In addition to interest, many lenders charge origination fees to cover the costs of processing and underwriting. Some lenders also charge prepayment penalties and draw fees, though this is less common among top lenders. Keep in mind, however, that any fees collected prior to loan approval—like application fees—are a red flag.
• Underwriting and funding speed. On average, it can take anywhere from one day (for some traditional lenders) to several months (for SBA-backed loans) for funds to disburse after submitting a loan application. For that reason, business owners who need to access funds quickly should choose a lender and loan type that works with their timeline.

Before applying, prepare necessary documents like: tax returns for a minimum of two years; at least 12 months of personal and business bank statements; a business plan; and details about any current and past business loans. This can help streamline the application process and may shorten the overall time it takes to receive funding. It can also help venture capitalists and other nonbank lenders overcome gender-based biases or concerns about your business.

The Equal Credit Opportunity Act makes it illegal for lenders to discriminate against applicants on the basis of sex, but women still face a number of challenges when financing their businesses. Borrowing experiences vary widely by business owner, but these are some of the common hurdles women must overcome when seeking to fund their businesses:

• Creditworthiness. Women previously had an average credit score one point lower than men, but the two genders are now evenly matched at 705. Even so, women hold more than 58% of student loan debt, and it takes women an average of two years longer to pay off student loan debt than men. What’s more, women still make just $0.82 for every dollar earned by men. All of these factors taken together make it more difficult for women to qualify for loans on the basis of creditworthiness and income.
• Industry. The top four industries for women-owned businesses are health, beauty and fitness services, food and restaurant, retail and business services. Lenders evaluate business loan applicants based on cash flow and a number of other industry-driven factors. Even successful entrepreneurs in less-profitable industries are less likely to get the financing they need—regardless of their gender.
• Investor bias. Outside of traditional bank lending, venture capitalists (VCs) and other financial backers are less likely to support women-owned businesses than male-owned competitors. In fact, only 2.3% of venture capitalist funding went to women-led startups in 2020. This is due, in part, to unsubstantiated concerns around the ability of female founders to run a business while filling more traditional roles. For that reason, it’s more difficult for women to get business financing.

While some women entrepreneurs may use business loans to grow and expand their businesses, others may not find them to be the best option. Fortunately, there are plenty of other alternatives available to fund your business.

Small Business Grants for Women

Small business grants are available to businesses that need help getting started or growing operations and are typically aimed at helping specific types of businesses—including those owned by women. In contrast to traditional business loans, small business grants for women do not require repayment, and there aren’t usually any fees or interest payments required.

In general, grants can be obtained from a range of sources, such as state and local governments, the federal government and corporate organizations. Keep in mind, though, that grants are extremely competitive and the application process can be more rigorous and time-consuming than obtaining a more traditional source of funding.

Consider popular small business grants for women like the Amber Grant and funds offered through the American Association of University Women, Girlboss Foundation or Open Meadows Foundation. Contact your local chamber of commerce to learn about applicable grants in your city or region.

Angel Investors for Female Entrepreneurs

If you have a strong idea and you’d rather avoid taking on debt as much as possible, one option might be finding an angel investor.

This is someone who has a high net worth and works with a business owner, offering funding and support. In return, they ask for an equity stake in your company, such as 5% of the business’s profits.

The average business investment from angel investors was $421,675 in 2021, according to the Center for Venture Research. Business owners who applied for funding from angel investors had about a 25% chance of success. If you were in a certain industry you had a greater chance of success too—notably the healthcare, software, energy and fintech sectors.

Business Credit Cards

Over two-thirds of business owners have a business credit card. Unlike other forms of business loans, credit cards work better as a flexible source of small-dollar funds. You wouldn’t want to buy real estate with one, for example, but it could be handy to buy materials and smaller equipment for your business. You can even get credit cards for your employees, so they have a handy way to pay for things if they have purchasing privileges with your business.

Business credit cards work similarly to your personal credit card: You can spend up to your credit limit and pay it back over time. And just like with personal credit cards, if you pay off all your charges in full each month, you won’t owe any interest. Additionally, some cards even offer valuable rewards like cash back or free travel.

Crowdfunding

If you have an idea for a splashy or Pinterest-worthy product, crowdfunding is a low-stakes way to get funding for your business, possibly even before you officially start it.

Crowdfunding is a loose term that means raising money for your business from a wide array of everyday people, including family, friends and even strangers. When you crowdfund, you typically don’t offer a financial return on people’s investments. Instead, you either ask for an outright gift or offer an item that your business makes in return.

You can approach people individually, but many websites can help you crowdfund your business (for a cut of the funds, of course). Kickstarter is a popular example—you can create and advertise a profile, collect money and offer “backers” the chance to receive an item your business makes. If you don’t reach your crowdfunding goal, you can offer to refund people’s money.

¹The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.