There are many resources available to help women entrepreneurs gain access to financing. These resources include free counseling services, women-specific startup incubators, and specialized small business loans for women.
Women-owned businesses that have been operating for 2+ years, that have credit score above 680 (check here for free), and which are profitable may qualify for a streamlined SBA 7(a) loan. You can get prequalified in minutes with SmartBiz.
How To Get Small Business Loans For Women
Before you decide to seek a small business loan for women, you should consider taking advantage of various free small business counseling services. These services will help you refine your business plan, and explore various financing options.
There are two main organizations that provide free business counseling services to women. The first is the Small Business Administration (SBA). They have a national network of nearly 100 Women’s Business Centers, that are designed to assist women in starting and growing small businesses. The services provided by your local Women’s Business Center may include business consulting, mentoring, training, networking, and non-direct lending through the SBA Community Advantage Loan Program. To find the Women’s Business Center nearest you, visit this link.
SCORE is another organization that provides counseling services for small businesses. The SBA funds SCORE, so their services are generally free, or very low-cost. This organization is not restricted to women entrepreneurs, but they will be able to help you find and access resources, specifically targeted to women. SCORE offers mentoring, training workshops, live webinars, and more. To find the nearest SCORE office, go here.
Once you have decided to pursue a small business loan for women, you should begin to evaluate your financing options. While the federal government does not provide specialized loans for women, there are a number of specialized financing options available for women. These include options from state loan programs, non-profits, and commercials banks.
Before applying for a loan, check your credit score to make sure you’re meeting minimum qualifications.
Banks and Microfinance Institutions
Many commercial banks and microfinance institutions, have specific small business loan programs for women. In some cases, the loans offered through these financial institutions will be SBA loans that are partially guaranteed by the federal government. You can read more about this type of loan here.
This section will outline some of the small business loan options available for women.
In 2005, Key Bank initiated the Key4Women program that provides women-owned businesses with access to capital, customized financial solutions, and educational and networking opportunities. For more information on this program contact Keybank.
Union Bank offers a dedicated small business loan program for women. This program provides flexible underwriting on loans and lines of credit up to $50,000. You can choose from secured, unsecured, and fixed- or variable-rate financing programs. In order to qualify for these loans, a woman must own and manage at least 51 percent of the business, have annual sales less than $15 million, have been in business for at least two years, and have borrowing needs of less than $2.5 million. Visit this link for more information.
Like PNC, Wells Fargo also is committed to making small business loans to women, and have committed to loaning $55 Billion to women owned businesses by 2020. For more information, see this article.
PNC Financial Services
PNC provided approximately $6.8 billion in loans and lines of credit to qualified women-owned companies over a 7-year period. One reason that PNC is able to service women entrepreneurs well is that they have 900 bankers specially trained as women’s business advocates. When you contact PNC ask to speak to a certified women’s business advocate.
Accion is not a conventional bank, but rather a microfinance organization that lends with the mission of empowering business owners with access to working capital and financial education. Accion offers a “Woman Entrepreneur Loan,” which is a $500-$10,000 business loan designed for women who are looking to expand their businesses. The loan offers flexible cosigner requirements, and competitive fixed annual interest rates. For more information, see this article.
State Loan Programs
Many states have programs designed to assist women entrepreneurs, so it is worth investigating the opportunities in your state. A good place to start your search is this website, which provides a useful tool for finding different financing resources. When you use the search wizard, you can search for different resources in your area specifically designed for women. The resources available will vary depending on location.
Another way to find state level programs is to do a Google search for “women business development <your state>”. Many states have offices of “women and minorities” that offer programs to increase access to capital for these demographics. The availability of these programs will vary from state to state, so you will have to spend some time investigating for yourself.
Non-Profits for Women Entrepreneurs
There are also a number of opportunities offered by women-focused non-profit organizations. These organizations are designed specifically to promote women-owned businesses and increase their access to capital. Some of these organizations provide direct funding, while others act as intermediaries that connect entrepreneurs with networks of experts and investors. Three organizations to consider are the Women’s Venture Fund, Astia.org, and Springboard Enterprises.
Women’s Venture Fund
The WVF provides small business loans and counseling services designed to help improve women-owned businesses. The WVF specializes in small business loans for women, so they understand the unique needs and challenges of women entrepreneurs. Another advantage is that there are no closing fees for WVF loans, they provide counseling resources to help you develop a strong business plan, and help you make projections that can help promote profitability. For more information on the Women’s Venture Fund, go here and here.
Unlike the WVF, Astia does not issue loans, but is more of a startup incubator for women. Astia focuses specifically on “high growth” women-owned startups, so it may be worth looking into if your vision is to turn your small business into a big one. Astia offers a “community of over 4000 experts committed to building women leaders and accelerating the funding and growth of the companies they lead. The Astia Advisor Network includes more than 1,200 investors and 450 current and former c-level startup executives.” For more information go here.
Springboard Enterprises is a technology oriented entrepreneurship incubator for women. According to Springboard, it is “a highly-vetted expert network of innovators, investors and influencers who are dedicated to building high-growth technology-oriented companies led by women.” Like Astia, Springboard does not offer loans, but rather a network of experts and investors that can increase access to capital. For more information, go here.
While programs specifically designed for women do exist, there is no one-size-fits all loan for all women entrepreneurs. One advantage of seeking a loan designed for women entrepreneurs is that some programs have more lenient borrowing requirements that could increase your chances of successfully receiving financing. Invest some time early on to access the free counseling services provided by the SBA and SCORE. This will help you refine your business plan and prepare materials relevant to your loan application.
For more on startup business loans, read our article here. For those businesses that have been operating for 2+ years, that have credit score above 680 (check here for free), and which are profitable, we recommend applying for a streamlined SBA 7(a) loan. You can get prequalified in minutes with SmartBiz.