Small Business Loan For Women – Funding Options For Women-Owned Businesses

Women-owned businesses are leading a significant shift in the business world. However, many female entrepreneurs still face obstacles in securing funding.

Whether you need a small business loan for women or another type of financing, it’s important to understand your options. Here are six top funding options for your business:.
Term Loans

Women-owned businesses are leading a growing segment of the economy. However, women often struggle to secure the financing needed to grow and thrive. Understanding your options for business funding can help you find the best loan for your needs.

Term loans, also known as fixed-rate business loans, provide a lump sum of cash with a specific interest rate and repayment terms that extend up to 20 years or more. Typically, you’ll need to prove that the capital you’re receiving will benefit your company for the duration of the loan term.

Term loans are a good option for buying equipment and making large investments, such as a point-of-sale system or commercial real estate. While these loan types are available from banks and credit unions, online lenders like OnDeck offer a higher maximum loan amount, faster funding and more lenient eligibility requirements for women business owners than traditional lenders. They may charge higher interest rates, though. You may need to provide personal and business credit reports, tax returns, financial statements and other documentation to qualify.
Lines of Credit

Women-owned businesses require capital to grow. However, many women entrepreneurs lack sufficient business credit to secure the financing they need. The good news is there are a number of lenders who offer funding for women-owned businesses.

Some online lenders, like Funding Circle, offer lower rates than traditional lenders and provide more flexible qualifications for applicants. Others, like OnDeck, offer fast approval and funding within days of applying.

Other lenders, like Noble Funding, offer accounts receivable factoring to help small businesses manage working capital needs. This form of business financing allows you to borrow against outstanding invoices and receive payment on a daily or weekly basis. The interest rate you pay depends on the factor rate and the amount of time you take to repay the funds borrowed. Unlike traditional small business loans, these types of financing don’t require personal guarantees from the borrowers. Instead, the entrepreneur takes on some level of risk by pledging their business’s equity as collateral.
Equipment Financing

As the name suggests, equipment financing is a way for small business owners to purchase equipment. This type of financing typically comes with more flexible terms and requirements than a traditional loan and could be an option for women who don’t have years of business history or high credit scores.

One online lender, National Funding, offers equipment financing up to $150,000 with repayment terms of up to 60 months. Eligible borrowers must have six months in business, a FICO score of 600 and an equipment quote from a vendor.

Another type of equipment financing, accounts receivable factoring, involves selling invoices to a factoring company at a discount in exchange for immediate cash. This funding option can be expensive, but it may also offer more flexibility than traditional loans.
Accounts Receivable Factoring

For women seeking larger amounts of working capital, an accounts receivable factoring loan could be the best fit. These online lenders like Noble Funding provide up to $8,000,000 of credit based on the value of outstanding invoices. They typically require high revenue and are a better fit for higher-growth companies.

Other types of small business financing include angel investments and venture capital. These investors often trade a large stake of their own capital for the money you need to grow your company. These arrangements can be difficult to qualify for because they require a significant amount of your own personal equity, as well as extensive networking.

Lastly, there are SBA-affiliated agencies and nonprofit organizations that provide microloans for women-led businesses. These programs typically offer more flexible terms than larger banks and may have less stringent eligibility requirements. They also help you prepare a business plan and navigate the loan application process. These funding sources aren’t available for every type of business, however.