Small Business Loans for Women: Pushing Past the Wage Gap

Small Business Loans for Women: Pushing Past the Wage Gap


Female entrepreneurs have become a powerful economic force, but small business loans for women are not always easy to come by. Businesses owned by women employ more than 8 million people and contribute $1.4 trillion to the U.S. economy, but women-owned businesses earn just $1 for every $2.30 earned by their male-owned counterparts, according to the U.S. Small Business Administration (SBA). Despite the lower revenue and greater need for capital, business loans for women are few and far between. Businesses owned by women are much less likely than those owned by men to receive small business loans, according to SBA lending statistics.

When a woman entrepreneur needs capital to continue growing her business, where can she turn? Most female business owners have two main choices: seeking investors or securing a business loan.

Could Investors’ Money Be the Answer?

Building your business with someone else’s money may sound like the ideal option. An outside investor sinks money into your business and you suddenly have the capital you need to grow the way you want to grow. Let’s get this deal signed, right? Not so fast. Investors don’t offer free money — there are always strings attached. And those strings often affect how you run your business as well as plans for future growth.

If you started your business in order to be your own boss and make your own decisions, soliciting investors probably isn’t a good fit. When an investor puts money into your business, they do so in exchange for part ownership in the business. When you accept an investor’s funding, you no longer own your entire company and you are no longer the only boss — you must now report to your investors. That may work well for business owners who intend to scale their firms quickly and sell them, but if your goal is to build and maintain your own business for the long term, seeking outside investors won’t work.

Two female business owners looking for loans for women entrepreneurs

How Can I Get Funding and Retain Control?

On the other hand, a small business loan allows you to maintain full ownership of your company, while still providing you with access to the funding you need to grow the business. As long as you can repay the loan on the agreed-upon schedule and terms, the money is yours to build your business as you wish.

Small business loans for women may not be frequently awarded by banks or even the SBA, but that doesn’t mean loans for women entrepreneurs aren’t available. You may just need to look for creative alternatives.

For instance, if your small business doesn’t qualify for a traditional bank loan, or if the bank’s terms don’t work for you, that doesn’t mean you’re out of options. There are a variety of other options for acquiring small business financing. You might qualify for a working capital loan to cover financial gaps in your day-to-day operations when you need it, like to cover accounts receivables while you wait for customers to pay. If you need new equipment or technology to grow your business, consider equipment leasing or financing. Lenders can often customize small business loans to match your specific needs, recognizing that no two women-owned businesses are exactly the same. And on top of a more catered loan package, these types of loans often come with quick turnaround times, so you’re not left in the lurch when you need funds fast.

Don’t assume that small business loans for women are out of your grasp. Be open to alternative and creative ideas for financing, and you’re likely to discover loans for women entrepreneurs that allow you to retain control of your business and still get the funding you need to grow.