Small Business Loans for Women

By Backd Business Funding, 22 September, 2022

Small Business Loans for Women

In the United States, women own more than 11.5 million businesses, according to the National Association of Women Business Owners (NAWBO). The NAWBO also reports that women-owned companies employ almost 9 million people and generate approximately $1.7 trillion in sales. And while these numbers may sound impressive—and in many ways they are—there is still a significant gap in the number of women who own businesses as compared to men. In fact, female-owned businesses only account for roughly 20% of all businesses in the US.

It has been historically difficult for women to secure business funding. For example, many women-owned businesses operate in the retail space, which traditional lenders see as a high-risk industry. And, persistent gender pay gaps play a role in this as well. Ensuring that new and existing female entrepreneurs have the capital and support they need to thrive is crucial to empowering women and leveling the playing field.

Backd offers working capital and business line of credit options for small business owners. Whether you are searching for information about loans or a line of credit for a woman-owned business, Backd has your back.

How Does a Woman Get a Business Loan?

There are a variety of loan options available for women looking for funding for their business. Some of the most common include Small Business Association (SBA) loans, bank or credit union loans, and microloans.

  • SBA Loans: The SBA offers several types of loans through its network of partner lenders, including 7(a) loans and 504 loans. Both are targeted at small business owners, with maximum borrowing amounts of $5 million. Female entrepreneurs can also take advantage of training and mentorship through a partnership between the SBA and the Office of Women’s Business Ownership (OWB). Can anyone get an SBA loan? Not exactly. Loans through the SBA do have requirements, and those who operate in certain industries or have low credit scores may struggle to qualify. 

  • Bank and Credit Union Loans: Traditional loans through financial institutions are another option for women to secure a loan. Credit unions in particular tend to offer lower interest rates, making them attractive for small business owners who need a lump sum loan. However, loans can take weeks or months to come through, so this option may not work well for short-term or immediate needs.

  • Microloans: Microloans, for women or other small business owners, provide up to $50,000 to help cover the costs of starting or growing a business. Microloans are available through the SBA’s network of nonprofit, community-based organizations. This option can work well for small business owners who need a relatively small amount of capital—microloans have an average amount of $13,000. However, they may not offer enough funding for larger needs.

When applying for a loan, you should expect to have all of your financials in order, including items like profit and loss statements, financial projections, loan application history, income tax returns, business leases, and more.

How Can I Get Funding for My Business Fast?

While all of the above options offer a number of benefits—especially if you’re looking to start or grow a business—sometimes you need flexible money fast to cover things like payroll, inventory, business growth opportunities, and more. That’s where a business line of credit can meet your needs.

A business line of credit is a type of small business funding that allows you to withdraw capital as you need it—whenever you need it—as long as you don’t exceed your credit limit. You’ll only pay interest on the amount you spend, rather than on the entire lump sum, making them a great option for small business owners.

Let’s break down an example of exactly how a business line of credit works. Julia, a small business owner who operates a boutique plant and floral shop, needs capital to expand her inventory. She applies for a business line of credit with a credit limit of $80,000. She uses $75,000 of it to purchase new inventory and new fixtures to display additional products, bringing her available credit down to $5,000. She quickly pays down $25,000, making her available credit $30,000. She then borrows another $10,000 to upgrade her store front. Julia can keep making payments against her line of credit—borrowing on it up to the credit limit—for as long as she needs.

Business lines of credit tend to move more quickly than loans, which makes them an ideal option for immediate needs. For example, Backds’ application takes about three minutes to complete, and you’ll have a response within just 24 hours!

Backd: Funding for Women-Owned Businesses to Grow 

Backd makes it quick and easy to qualify for a business line of credit. To qualify, you just need to operate a US-based business that’s been in business for at least one year, have a 600+ FICO, and have a minimum of $300,000 in annual revenue. The process looks like this:

  1. Apply: Submit basic information about your business, including your annual revenue, through an online application and get a decision in less than 24 hours. Backd offers credit limits from $10k to $750k.

  2. Draw Funds: Once your funding is available, you can access it through an online dashboard that allows you to track your draws and payments.

  3. Make Payments: With a line of credit, you’ll generally make payments weekly.

  4. Get More Funds: As you pay down any capital you borrow, you can continually access funds up to your available credit limit.

Fill out an application today to get started.