1 – Traditional Bank
Many banks have special programs for women-owned businesses. They generally offer flexible underwriting and competitive interest rates. However, traditional banks usually have strict criteria in order to qualify. To seek out better lending options from a traditional bank — or any lender — we suggest you consider becoming certified by the Women’s Business Enterprise National Council or the National Women Business Owners Corporation. Both of these certifications are attractive to lenders and may grant you access to additional funding and/or government programs.
2 – Apply Online
This is usually a simple process because oftentimes online lenders will ask if you are a woman-owned business in the loan application questionnaire. Many online websites work with lenders who specialize in loans catered to the unique needs of a woman-owned business. They may also offer lower interest rates and flexible repayment terms. Magilla Loans is a great starting place to shop and compare loans because we work with a vast network of lenders who fund women-owned businesses, and they offer very attractive incentives.
3 – Crowdfunding
There are plenty of crowdfunding websites where you can attract folks who are specifically looking to fund female businesses. There are actually a few crowdfunding websites cropping up that are 100% dedicated to female-led startups and women-owned small businesses. A couple of them are IFundWomen and WomenYouShouldKnow. They not only offer crowdfunding services, but they both have useful tools and resources specifically catered to female entrepreneurs.
4 – SBA Loans
The SBA does not lend to businesses directly. However, they set the guidelines for loans which are funded by its partners. It’s partners include traditional lenders, community development organizations, and micro-lending institutions. The loans are generally guaranteed which reduces the payback risk, making lenders more inclined to approve the loans. The SBA guaranteed loans are not only available to women-owned businesses, they are offered to all businesses that do not have access to financing with reasonable terms.
5 – Line Of Credit
This may be the easiest way to obtain financing for a new business. The beauty of a line of credit is the flexibility. Because lines of credit are unsecured loans, they work just like a credit card and do not have a fixed monthly payment. Lines of credit offer a pre-determined credit limit, and you can borrow any amount at anytime, as-needed. This is a great option for working capital, to purchase more inventory, help with payroll, or to use as an emergency fund.
6 – Accelerators & Incubators For Women
Accelerators and incubators are a great starting point for women-owned businesses because they offer mentorship, funding, and a vast variety of resources, including access to technology tools. Three of our favorite options for women are Women’s Startup Lab, Cartier Women’s Initiative, and Funding $age.
7 – Grants
Grants are not loans but they are a fantastic option to obtain financing for women-owned businesses. The tricky part is getting the grant because many of them require a rigorous application process and some have competitions. There are countless grants available to businesses that qualify but we have selected a few really good options to consider if you’re looking for a grant. Idea Cafe and FedEx Small Business Grant Contest are not limited to women-owned businesses but they offer attractive grants. A few grants exclusive to women-owned businesses are the Eileen Fischer, Huggies MomInspired, and InnovateHER grants, which are backed by the SBA.
8 – Angel Investors
Similar to a grant, most angel investments are not an actual loan but an investment in the company. However, some angel investors do require repayment for a portion of the money invested once the business becomes profitable. This can be a good option for a new business that needs startup capital and is willing to offer equity. A few female-focused angel investor groups are Pipeline Angels, Women’s VC Fund, and Springboard Enterprises.
9 – Alternative Lenders
If all else fails, you may consider an alternative lender. Starting a new business is risky, and lenders are hesitant to fund new ventures. In fact, according to the Global Entrepreneurship Report, over half of all new businesses shut down within the first 5 years. This makes a new business loan high-risk and difficult to obtain. Some alternative lenders do offer women-owned programs with lower rates, however they may still be much higher than other lenders. Thus, we suggest you start with the options that offer the best rates and work your way down. If an alternative lender is the only way to get financing, then we recommend you strategize your repayment plan and pay off the debt ahead of schedule or refinance the loan to get a better interest rate.