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Government Small Business Loans & Grants for Women

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Owning a business is hard work, and women are among many entrepreneurs looking for monetary solutions for their endeavors. Women entrepreneurs like yourself are likely assessing government loans for small business for women, as well as grants and other options.

Today, around 42% of all American businesses are women-owned.

In this article, we explore a couple financing sources other female entrepreneurs have found helpful, including government-issued small business loans for women and small business grants for women. We also discuss why loans are great financing options and other alternatives to government loans.

 

Top 4 Women’s Small Business Government Loans

In the U.S., the Small Business Administration (SBA) is an independent agency operating under the federal government. Their mandate is to offer a wide array of financial support to small business owners—including business loans for women and disabled veterans.

The SBA’s small business loans are backed by the government, meaning you can expect more favorable repayment terms than traditional bank loans.

To qualify for an SBA loan, your business must meet certain eligibility requirements, such as being a for-profit business, operating in the U.S., and having a reasonable amount of equity invested in the business.

Now let’s look at several SBA loan options that women entrepreneurs should consider:

 

1. SBA 7(a) Loans

SBA 7(a) loans are the most common SBA financing option because they’re extremely versatile and can be leveraged for various purposes like working capital, equipment purchases, and even refinancing old debt.

 

2. SBA Microloans

SBA microloans are designed for small businesses in need of small amounts of capital, typically in the range of $500 to $50,000, with the average loan amount being $13,000.

These loans are specifically geared to entrepreneurs who fail to qualify for a traditional bank loan. This means the application process is less rigorous, but, due to the higher risk of defaulting, loans may be subject to higher interest rates.

Female entrepreneurs interested in applying must present a strong business plan and have a decent credit history. In conjunction with a microloan, the SBA may also offer technical assistance and business training to improve your chances of success.

 

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3. SBA 504 Loans

Are you a woman business owner looking to buy new commercial real estate or renovate an existing property? Or perhaps you’re in need of some new business equipment? If either case applies to you, then consider an SBA 504 loan.

To qualify, you’ll need a verifiable net worth of less than $15 million and a net average income of less than $5 million over the previous two years. One of the major benefits of a 504 loan is that you can finance up to 90% of fixed asset purchases, such as property, buildings, and equipment.

You can apply through a non-profit business, known as a Certified Development Company (CDC), that works alongside the SBA and private lenders to provide business financing to women entrepreneurs. Be prepared to present a solid business plan and demonstrate your ability to repay the loan.

 

4. Small Business Innovation Research (SBIR)

The SBIR program is a government initiative under the SBA. They provide funding to small businesses in support of research and development (R&D) projects.

SBIR loans are available to women-owned businesses engaged in R&D in fields like science, engineering, and tech. The program is designed for those who can’t access the traditional funding needed to conduct R&D and commercialize their innovations.

 

While this list of government small business loans women can apply for is not exhaustive, it is a good start. In addition to federal loans, it’s worth investigating loan options specific to your state of residence.

 

government loans for small business for women

 

5 Benefits of Government-Backed Small Business Loans for Women

Now that you know where to apply for government loans for women’s small businesses, let’s look at why you should apply for them.

 

1. Lower Interest Rates

Despite the fact that some SBA loans have higher interest rates than others, the general trend is that government-backed loans have lower interest rates than traditional loans.

This perk can be especially useful for female entrepreneurs looking to save money on financing costs over time.

 

2. Flexible Lending Criteria

Government-backed loans often have more flexible lending criteria than traditional bank loans. This makes it easier for women entrepreneurs to qualify for financing. For example, even if you don’t have an established credit history or any collateral to put up, you may still be eligible.

 

3. Access to Capital

As a woman entrepreneur looking to start or grow your business, you may find yourself in need of substantial funding. That’s where the government’s small business loans for women come in. They are an attractive choice because, in many instances, they give you access to more capital than other lending options.

 

4. Longer Repayment Terms

Women’s small business government loans offer longer repayment terms than other loan options, making it a great way to reduce your monthly payments and improve cash flow.

 

5. Technical Assistance and Support

Besides loans, many government-backed loan programs offer technical assistance, mentoring, and resources to help female entrepreneurs develop their business plans, marketing strategies, and financial management skills. This kind of training is especially invaluable for first-time or inexperienced business owners.

 

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Alternatives to Government Women’s Small Business Loans

Below, we look at three alternatives to government small business loans for women.

 

1. Private and Federal Grants

In addition to loans, the government also offers business grants for women. The main difference is that loans need to be repaid, while small business grants do not. It goes without saying that securing a grant is often more competitive than a loan.

Luckily, there are many non-government organizations that offer grant financing, too. In fact, with a bit of research, you’ll find plenty of places to apply for a grant program. Some of them include:

  • Cartier Women’s Initiative
  • Amber Grant
  • iFundWomen Universal Grant Application Database
  • Comcast RISE
  • Small Business Administration
  • And many more

 

2. Traditional Banks

Big banks are known for offering competitive interest rates and terms to women entrepreneurs. The downside is that they also often have lengthy application processes, collateral and high credit score requirements, fixed loan terms, and limited customer service. You can learn more about applying for a traditional bank loan here.

 

3. Alternative Lenders

Women-owned businesses may find that alternative lenders offer several benefits over traditional lenders when it comes to obtaining loans. Some of these benefits include:

  • Easier approval process
  • Faster funding
  • Customized loan products
  • Better customer service

As a general rule, alternative lenders offer a more personalized and flexible approach than either big banks or the SBA, making it especially appealing for female entrepreneurs who prefer a more tailored loan option.

 

Women's Small Business Government Loans

 

The Top 4 Small Business Grants for Women

If you’re looking to pursue all financial opportunities for your business, here are a few of the grants for women-owned businesses you can apply for.

 

1. Cartier Women’s Initiative

The Cartier’s Women’s Initiative Awards are best known for offering three small business grants for women in nine regions across the globe. These awards aim to support businesses still in developmental infancy, especially businesses centered around addressing social and environmental issues.

Grants range from:

  • First place: $100,000
  • Second place: $60,000
  • Third place: $30,000

 

2. Amber Grant

The Amber Grant, from WomensNet, is awarded every month—amounting to a $10,000 grant for woman-owned small businesses, each month rotating to a new business category. An additional $10,000 general grant is also available for any women-owned business.

Every year, The Amber Grant also selects one of the 12 category-specific grant winners and one of the 12 winners of the general grant to receive an additional $25,000 each.

 

3. iFundWomen Universal Grant Application Database

If you’re looking for an easy way to find grants for women starting a small business (or grants for those with an established venture), the iFundWomen database is a great place to start. Rather than chasing down individual options to pursue, with iFundWomen, you can submit an application and be matched with grants based on requirements.

Once you’re listed as a match, you’ll be invited to apply.

 

4. Comcast RISE

Another popular option for free grants for small businesses for women, Comcast RISE offers $10,000 in grants to women-owned businesses several times per year, especially focusing on small business grants for women of color. Each grant cycle is open to applicants in specific cities, such as Chicago and Miami.

 

5. Small Business Administration

To help small businesses drive innovation, the SBA is best known for two highly competitive grants:

  • Small Business Innovation Research Program: Dedicated to catalyzing innovation in the tech sector, the SBIR offers an easy-to-use search option for grants from 11 different federal agencies.
  • Small Business Technology Transfer Program: Similarly dedicated to innovation in technology, the SBTTP focuses on expanding private/public sector partnership opportunities to small businesses. Small business owners also get the opportunity to collaborate with the country’s leading nonprofit research institutions.

 

Getting Small Business Financing for Women Is Easy, With Credibly

Now that we’ve discussed small business loans for women (government loans, in particular), it’s time to decide which financing option meets your unique business needs. Of course, despite its many benefits, securing government loans for women-owned small businesses can be tricky and time-consuming.

We can help. Credibly’s financing experts can help walk you through your choices and which ones might be most beneficial for your business.

 

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