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Why is it Difficult for Women Entrepreneurs to Get Approved for a Business Loan?

Small Business Loan for Women
Despite the progress we’ve made as a society, the business world still has an uneven playing field when it comes to gender. Women are paid less than men for the same work.

Many are punished (in the form of less consideration for promotions or pay increases) for having children and families. And, many of these same problems extend to small business owners. 

Women small business owners have more difficulty in obtaining financing, small business loans, and lines of credit than their male counterparts. Small business loans for women can be denied for a variety of reasons. Some of these reasons are financial, and not specific to women. 

Others are non-financial, and generally rooted in sexism. Below, we look at some of the reasons why it is so difficult for women entrepreneurs to get approved for a small business loan.

We also offer up some advice on how female small business leaders can obtain small business funding, highlighting small business loans for women from BizFly Funding.

Non-Financial Reasons

Sexism has to be addressed in the context of why women entrepreneurs have a more difficult time getting approved for small business funding, loans, and credit. 

While there are equal opportunity lending rules, and discrimination is largely prohibited under law, that doesn’t mean it has gone away. Subtle and not-so-subtle discrimination against women remains a persistent problem in the business world, and that includes within lending as well.

Small Business Funding

This is just one of the many reasons why many better lenders have made significant efforts to specifically offer loans for women owned businesses and small business loans for women

Ensuring equal opportunity access to funding for small businesses is the best way to ensure the marketplace of ideas, individual hard work, and business acumen are ultimately the driving factors in whether or not a business fails or succeeds.

Of course, there are plenty of rational, financial reasons that women business owners can be denied a loan as well. Some of these may impact women more than men simply based on the types of businesses that tend to be more often run by women than men, rather than sexism. 

Others may be a cause, or effect, of overall systemic sexism or elements of promotions and wealth in our society. We explore these financial reasons for lack of access to small business funding below.

Lack of Collateral

Often, women have a harder time qualifying for small business funding due to a lack of, or less collateral than their male counterparts.  This can be considered as a function of the overall wage and gender wealth gap. 

According to Barron’s, the average female and average male wage earner will end up with a gap in excess of $1 million in earnings between them. 

This translates to less savings, less home and auto ownership, less business ownership, and in general, less assets and wealth for women than men. This means that many business loans for women are denied due to risk from insufficient collateral. 

Secured business loans require collateral, and a lower rate of collateral and asset ownership means a higher bar of difficulty in qualifying for secured loans.

Regulatory Requirements

Generally speaking, banks find small businesses to be fairly high-risk investments in the first place. They tend to avoid lending to small businesses, or have extremely high requirements to qualify for a loan. The financial crisis of the late 2000s made many of these rules even stricter. 

As 30% of all small and medium-sized businesses are women owned and operated, this means a sizeable portion will likely have trouble obtaining funding from a bank. Many alternative, non-bank lenders, such as BizFly Funding, have been working hard to fill this lending gap.

Unsecured loans for women owned businesses don’t have these same bank regulatory requirements, meaning loans are possible even in terms of business loans for women with bad credit, limited operating history, or minimal revenue or cash flow.


Just as traditional lenders consider small businesses to be a risk, many also consider those run by women to be riskier than those run by men. This harkens back to a lot of the same sexism and discrimination that we highlighted at the start of this guide.

The end result of this thinking has to be a logic that says women business owners are either more unstable, take more risks, or are less capable than their male peers, which simply isn’t the case.

It’s classic discrimination. In fact, as many people point out, women owned businesses being in the minority often mean they have a competitive advantage, a more diverse set of ideas and voices guiding them than many traditionally male-run businesses.

That’s just one of several reasons why non-bank and non-institutional lenders, such as BizFly Funding, put so much emphasis on providing business loans for women. Our consideration is your ability to repay the loan or credit line – not your gender.

Revenue or Cash Flow Issues or Limited Business History

Of course, there are legitimate business reasons that don’t have anything to do with sexism, too. Poor revenue or issues with cash flow are often the cause of loans being rejected. This is true for all businesses, regardless of whether or not they are male or female owned. 

As stated earlier, many banks don’t like to take the risk of lending to small businesses in the first place. And many new small businesses have limited revenue and tight cash flow for the first year or two of their operations.

A limited business history is also problematic for many lenders, as it shows a lack of stability and doesn’t provide a clear picture of periodic revenue or long-term stability. At BizFly Funding, we understand this. 

And so we keep our lending requirements as minimal as possible, so that we can service as many small business funding needs as possible – including loans for women owned businesses.

Small Business Loans for Women with BizFly Funding

BizFly Funding is proud to offer small business loans for women and loans for women owned businesses. Our business loans for women are no different than our regular loan products.

Rather, this area of focus is specifically about righting the wrongs that so many banks and financial institutions continue to perpetuate in discriminating against women.

As we mentioned earlier, our main consideration in approving any of our small business loans is whether or not your business has the means to repay the loan as agreed and on time.

Whether you’re a woman, man, non-binary, or anything else – we want to serve your needs, and help your business grow.

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