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SBA Loan Facts: Small Business Loans For Women-Owned Businesses

Government funding for female entrepreneurs made significant gains this year. According to the federal agency, U.S. Small Business Administration loans for women were up 18 percent in fiscal 2015 over the previous year. The SBA itself posted a record year with a whopping $23.6 billion in loans, 23 percent higher than in 2014.

SBA loans for women made up only about a third of the agency’s annual funding over the past few years. But the SBA expects its lending to women business owners to rise, says Mark Quinn, the SBA district director for Northern California.

“The kinds of businesses we see more women involved in now need less capital investment,” he tells NerdWallet, citing women-owned businesses offering professional or consulting services. But in the future, he says, the SBA expects the range of small companies women take on and their overall need for small-business loans to grow.

Women have various choices for small-business financing, but SBA loans are among the least expensive options. Here are three things you should know if you’re a woman looking for an SBA loan.

What Are Small Business Association (SBA) Loans, And Why Are They A Big Deal For Women Entrepreneurs?

SBA loans are the best financing option for any small business owner because they’re typically the least expensive.

This is particularly true for women small-business owners, who play an increasingly important role in the U.S. economy. There are more than 9 million women-owned businesses in the U.S., employing nearly 8 million workers, according to a 2015 American Express report.

Under the agency’s most popular program, the 7(a), the SBA guarantees up to 85 percent of $150,000 or fewer loans and 75 percent of more than $150,000. These loans usually have low APR, currently at 5.5 to 6 percent.

The SBA also offers real estate and equipment loans, veteran business loans, and microloans, offered through nonprofit community-based organizations, up to $50,000 with maximum terms of six years.

Furthermore, the SBA isn’t just about funding for women small-business owners.

The federal agency also serves the non-financing needs of women entrepreneurs through its Office of Women’s Business Ownership, which runs a nationwide network of education centers.

What Do Female Business Owners Need To Do To Get An SBA Loan?

Here’s the downside to SBA loans: They’re tough to get.

The SBA has a long list of application requirements; most focused on your credit history and the financial health of your small business. These requirements can be challenging for those with bad credit (Alternative Funding through is an option. According to a recent Experian study, women business owners had an average consumer credit score of 689, slightly lower than male entrepreneurs, at 699.

Cleaning up your credit and the financial record is wise if you’re looking for small-business financing, especially from the U.S. Small Business Administration.

“Be smart about any debt you have,” Deborah Sweeney, CEO of MyCorporation, tells NerdWallet. MyCorporation helps its clients through the process of setting up a small business. “Work to pay that debt off as quickly as possible.”

What If Your SBA Loan Application Is Rejected?

Again, it would be best to keep in mind that SBA loans are a tough get.

But here’s good news if you’re a woman small-business owner: You have plenty of options.

Todd of CorpNet says she tells clients — especially women — to apply for SBA loans. “Go after it, apply and see what happens,” she says. But she also tells women small-business owners to “have some alternative plans in place just in case the SBA loan doesn’t happen.”

BitX Funding provides small business loans where lenders compete for your business.  Although the APR on the financing we offer is typically higher than the SBA’s rate, we have viable loan options for women entrepreneurs looking to build a more substantial small business.

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Published by Chris Davies, Creative Copywriter at The Labate Group in Westport, CT.


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