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Small Business Loans for Women Entrepreneurs

Small Business Loans for Women Entrepreneurs
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One of the principles of the American business marketplace is supposed to be that the best ideas, the best products, and the best services will rise to the top. The market will decide winners and losers based on the merits.

Unfortunately, this isn’t entirely the reality that exists on the ground. Women entrepreneurs face an up-hill battle, and it starts with obtaining small business funding.

Funding is critical for a small business to develop, grow, and thrive. Without sufficient small business funding, many small businesses fail – in fact, around half fail within the first five years of operation. 

Today, around 40% of all small businesses are owned and operated by women entrepreneurs. Yet disproportionately, they find it more challenging than their male counterparts to obtain equal amounts of credit or small business loans, equally favorable loan terms, and so on.

women small business loan

This is due in some small part to overt discrimination and sexism on the part of some lenders, especially traditional lenders and banks.  However, in many cases, it’s more of a covert, societal problem. 

The myriad of ways in which society punishes and discriminates against women have a cumulative effect that make obtaining small business funding more challenging. 

The statistics bear this out – lower lifetime earning totals, less pay for the same job, and lower average credit scores (all of which affect small business funding eligibility) based on gender disparities only.

On top of that, many lenders see small businesses as a high-risk investment to begin with, and even more so when there is a woman at the helm. That kind of overt sexism persists even today, and can further raise the bar that women need to meet in order to obtain small business funding.

But fortunately, there are some promising signs of improvement. Alternative lenders have come to prominence, that don’t have the institutional heritage of sexism and discrimination that can exist among banks and traditional lenders. 

At the same time, many of these same alternative lenders have made a concerted effort to provide access to credit for women-owned businesses. Small business loans for women, even business loans for women with bad credit, are now easier to obtain than ever before. 

Banks and Traditional Lenders – Why Small Businesses are Such a Risk

Banks and traditional financial institutions don’t like to take risks. Oh, certainly, they take a lot of risks on the investment banking side. But commercial banking – deposits, savings and checking accounts, loans, and credit products – are a highly risk-averse, regulated industry. 

Those regulations got even tighter after the financial collapse of the late 2000s. Already, banks and traditional lenders had maintained fairly high bars to qualify for a loan or credit product – a high credit score, fairly high revenue requirements, as well as often lengthy time-in-business requirements. 

These got even more stringent after the financial collapse. Effectively, this means that small business loans from these sources were restricted to only those with the best credit, and established small businesses that were doing well economically.

For newer small businesses, or those with limited credit history or poor credit, there was virtually no chance of obtaining a small business loan. 

And, as discussed above, since female ownership and leadership was often seen as an increased element of risk for a small business, and credit scores and other metrics were already artificially lower, this meant it was even more difficult to obtain small business funding.

The Rise of Alternative Lenders

Fortunately, though, many enterprising entrepreneurs and those fed up with the traditional lending industry set out to change things. Alternative lending and financial services (sometimes called fintech) companies were born.

Today, there are numerous private, alternative, non-bank lenders catering to individuals, businesses, and other niche or specific markets.

The Rise of Alternative Lenders

Many of the alternative lenders are also acutely aware of the difficulties that people with bad credit, women-owned businesses, and other particular demographic groups have had in obtaining small business funding in the past. 

That’s why many have made great efforts to specifically offer small business loans for women, business loans for women with bad credit, business loans for poor credit customers, and a diverse array of financial products. 

What’s more, they’ve brought down the lending requirements for many of their products, such that more and more people can readily obtain access to them.

A Focus on Access Includes Women Entrepreneur Loans

That focus on access is what sets alternative lenders apart. For example, a traditional bank or institutional lender may require a 700 credit score or higher in order to qualify for a small business loan (among other requirements). 

Many alternative lenders have credit score requirements in the 600 or even 500 range. This opens up borrowing opportunities for a much larger number of people and businesses.

For example, BizFly Funding, one of the premiere and trusted names in small business funding, including small business loans for women, has rather generous and simple-to-meet criteria for many of their financial products. 

Lines of credit, merchant cash advances, and small business loans are all readily accessible.

Specifically when it comes to women entrepreneur loans, the eligibility requirements are as follows:

Loans for women-owned businesses, as you can see, are quite accessible at BizFly Funding.

The interest rates may be slightly higher than a bank, but it’s hard to compare them, when most women-owned businesses (and small businesses in general) cannot obtain the small business loans they need from a bank or traditional lender.

BizFly Funding also doesn’t skimp on service. Quite the opposite. You can get pre-approved in as little as 30 minutes, and apply for a loan entirely online. One of the customer service team members will be in touch shortly thereafter. 

You can get your funds within 1 business day following loan approval in many cases. If you need money now to boost your business, pay your bills, and fund your operations, then check out BizFly Funding – especially if you are looking for small business loans for women!

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