Yet, according to the US Small Business Administration, they receive just 4% of the small business funding that is issued in an average year. The lack of access to capital can be crippling for small businesses, and place artificial barriers to entry for women-owned small businesses.
Fortunately, many alternative, non-bank lenders have made efforts to help remedy this legacy of discrimination and misogyny, by offering special small business loans for women.
The Reasons for Special Attention to Business Funding for Women
At first, many people might balk at the idea of “special” small business loans for women. Some might argue that it’s a form of continued discrimination, by having a separate category of products or loans for women owned businesses.
But nothing could be further from the truth. In fact, it’s an effort to overcome those inequalities, and provide women entrepreneurs loans to get their small businesses off the ground.
The concessions made to this effect don’t make it more difficult for male owned businesses to obtain funding or anything of that nature. Rather, it helps to level the playing field, and overcome the historic disparity that has existed and persisted solely on the basis of gender.
Small business loans for women help to overcome things like the pay gap (with women making between 78 and 80%, on average, of men for the same positions and work), the lifetime earnings gap, and the credit score gap.
All of these factors, in addition to blatant sexism, can make it more difficult to obtain business funding for women and loans for women owned businesses.
By leveling the playing field, and giving special attention to this under served and historically discriminated class of borrowers, alternative lenders are helping to ensure that ideas, service, and business skill determine if a small businesses sinks or swims, and NOT the gender of its owner or operational team.
Small Business Loans for Women Owned Businesses
In form and function, small business loans for women owned businesses aren’t any different than generic small business loans. They provide a lump sum of money, and are then repaid over an agreed-upon loan term, in payments consisting of principal and interest.
The key difference in business funding for women categories is that the eligibility or qualification requirements are often lowered somewhat, to compensate for the aforementioned gaps and disparities in pay, credit scores, and net worth that hold women entrepreneurs back.
For example, with most alternative non-bank lenders, the amount that can be borrowed as part of a loan for women owned businesses is the same as their general small business loans.
But if the general small business loan has a credit score requirement of, for example, 550, then a small business loan for women from that same institution may only require 525 or 500 as a minimum credit score.
Likewise, things like months in business, monthly revenue, and other factors are somewhat scaled down, to compensate and level the playing field.
These changes in lending practices can help ensure that small business loans are more fairly and evenly available – and overcome some of that 96% to 4% funding gap mentioned at the top of our article.
It’s also worth noting that, since women with equal financials and history tend to have somewhat lower credit scores than men, it can be doubly hard to obtain loans for women owned businesses.
Fortunately, both in serving women and the population as a whole, it’s easier to obtain loans, even with bad credit, from alternative non-bank lenders.
Indeed, business loans for women with bad credit are almost unheard of at traditional lenders and banks. But they’re part of the everyday offerings from alternative lenders.
Other Small Business Funding Options
Women entrepreneurs’ loans aren’t the only small business funding option available. It’s just usually the category of small business loans that is specifically adjusted to make them more accessible to women owned businesses.
Ignoring, for a moment, all the disparities we’ve discussed, women entrepreneurs are still free to apply for all the same ranges of small business funding options as male owned businesses, or mixed gender businesses – there are certainly no restrictions on the basis of gender.
This means that small business loans can also be matched with funding options like lines of credit, merchant cash advances, debt consolidation loans, and more.
Women Entrepreneurs Loans and Small Business Loans for Women from BizFly Funding
If you’re a small business owner, and especially a female entrepreneur, and are interested in small business loans for women or any of the other small business funding options available, your best bet is to seek out an alternative, non-bank lender.
One of the best is BizFly Funding. They’re a US-based private lender that deals exclusively in small business funding.
They offer a full range of options that we’ve discussed in this article, including small business loans, lines of credit, merchant cash advances, debt consolidation loans, short-term small business loans, and more.
Perhaps most importantly, they offer a special category of small business loans for women, with adjusted qualification requirements to make it easier for women entrepreneurs to gain access to the capital they need.
These loans require only a 500 minimum credit score, 2 months in business, and $8,000 in monthly revenue – significantly below the general small business loan requirements that they offer.
In addition, BizFly Funding offers a lot of advantages over other lenders. You can apply online, and get approved or pre-approved quickly. The customer service is excellent, and one of the BizFly Funding team members will be in touch, usually within just a few hours.
Funding is fast too, and can often be delivered within 1 business day. Generous funding amounts are available, along with competitive interest rates and diverse product offerings.
