Small business loans for women: Funding options to grow your business

Published Tuesday 4 November 2025

Table of contents

• Types of business loans for women
• SBA loans for women-owned businesses
• Small business loan challenges
• Grants and alternative funding for women
• Who's helping women get business loans
• How to improve your loan approval chances
• Managing your business finances after securing funding
• FAQs on business loans for women

Key takeaways

• Explore SBA loan programs, particularly 7(a) loans and microloans up to $50,000, which offer favorable terms and lower interest rates specifically designed to help women entrepreneurs access capital with reduced collateral requirements.

• Strengthen your loan application by developing a comprehensive business plan, maintaining good personal and business credit scores, and organizing clean financial records including profit and loss statements and balance sheets.

• Consider alternative funding sources beyond traditional banks, including specialized women's lenders like Women's Venture Fund and Grameen America, peer-to-peer lending platforms, and investor funding from angel investors focused on women-led businesses.

• Implement strong financial management practices after securing funding by tracking every dollar, monitoring cash flow in real time, and maintaining organized accounting records to ensure successful loan repayment and prepare for future growth opportunities.

Types of business loans for women

You have several options to meet your needs, whether you’re just starting out or ready to expand.

Common types of business loans include:

• Term loans: You receive a lump sum of cash upfront and repay it over a set period with regular payments. Use these for large, one-time investments such as buying equipment or renovating your space.
• Business lines of credit: You get access to a pool of funds to draw from as needed. You only pay interest on the amount you use. It's a flexible option for managing cash flow or handling unexpected expenses.
• SBA loans: The Small Business Administration backs these loans, so they often come with favorable terms and lower interest rates. They can be used for a wide range of purposes, from working capital to real estate.

SBA loans for women-owned businesses

The US Small Business Administration (SBA) doesn't lend money directly, but it guarantees a portion of loans made by its lending partners. This reduces the risk for lenders and helps small businesses get the funding they need.

For women entrepreneurs, two popular SBA programs are:

• SBA 7(a) loans: This is the SBA's most common loan program. It's highly flexible and can be used for everything from working capital and inventory to refinancing debt or buying a business.
• SBA Microloans: If you need a smaller amount of funding, typically up to $50,000, consider a microloan. These loans are provided by nonprofit, community-based lenders and can be used for startup costs, inventory, or supplies.

Small business loan challenges

Women have overcome many historical and systemic barriers when applying for business loans, and new opportunities are now available.

Financial barriers:

• limited credit history, as many women-owned firms are new businesses with less established credit
• fewer assets, such as property, to use as collateral
• reliance on personal savings and credit cards for startup funding

Historical context:

• requirement for male guarantors for women's business loans until 1988
• elimination of the male guarantor requirement by the Women's Business Ownership Act
• ongoing access gaps despite legal changes

Grants and alternative funding for women

You can also access funding through alternative channels beyond traditional loans:

Peer-to-peer lending:

• connecting borrowers directly with individual investors
• offering more flexible requirements than traditional banks
• providing faster approval and funding processes

Investor funding:

• support from angel investors who focus on women-led businesses
• investment from venture capital firms with diversity-focused strategies
• funding through crowdfunding platforms for product-based businesses

Additional resources:

For more information about all financing options available to your business, see the complete guide to financing your business.

Who's helping women get business loans

You can find business loans and support from several organizations. Here are some options:

Government programs:

• : preparing loan applications and providing loan guarantees for lower rates and reduced collateral requirements
• SBA Microloans: Offers $500 to $50,000 through Community Development Financial Institutions (CDFI)

Specialized women's lenders:

• : providing SBA microloans and business advisory services for urban communities
• : Offers startup loans from $250 to $25,000 for low-to-moderate income women
• : Provides microloans and financial education to help women escape poverty through entrepreneurship

Private foundations:

• : Connects established, revenue-generating businesses with CDFI network lenders

How to improve your loan approval chances

Applying for a loan is easier when you prepare in advance. Lenders want to see a clear plan and organized finances. This helps you get approved.

To strengthen your application, focus on these key areas:

• Develop a solid business plan: Show lenders your strategy, market, and financial projections. A clear plan shows your commitment.
• Maintain good credit: Your personal and business credit scores are important factors. Pay your bills on time and manage your existing debt to keep your score healthy.
• Keep your books organized: Lenders will want to see clean financial records, like profit and loss statements and balance sheets. Using accounting software helps you keep everything accurate and ready to share.

Managing your business finances after securing funding

Once you secure funding, focus on managing your capital wisely. Managing your new capital wisely is key to putting your business on a path to sustainable growth. Track every dollar to make smart decisions and stay on top of your loan repayments.

With Xero accounting software, you can monitor your cash flow, track expenses, and see your financial performance in real time. Having a clear view of your numbers helps you stay in control and focus on what you do best – running your business. A strong financial foundation helps you manage your loan. It also prepares you for future growth opportunities.

FAQs on business loans for women

Here are some common questions about getting small business loans for women.

How hard is it for a woman to get a business loan?

Although women have faced challenges in the past, access to funding is improving. Research finds women are less likely to apply for loans because they fear denial, but lenders are recognizing the value of women-owned businesses.

Lenders are increasingly recognizing the value of women-owned businesses. By preparing a strong application with a solid business plan and clean financial records, you can significantly increase your chances of approval.

What is the best business loan for women?

The best loan depends on your needs. An SBA 7(a) loan works well for general business purposes, while an SBA Microloan suits smaller, short-term needs. A line of credit offers flexibility for managing cash flow. It's wise to assess your goals before choosing.

Do I need a perfect credit score to get a business loan?

You do not need a perfect credit score, but a good score increases your chances of approval. Lenders check your credit history to see if you are a reliable borrower. If your score is lower than you want, you still have options. Community lenders often offer microloans and consider more than just your credit score.