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BFS Capital Blog

Small Business Loans for Women: What You Need to Know

September 15, 2016

For 9.1 million U.S. women, their big dream is to grow their small business.

To make this dream a reality, it takes hard work, initiative, perseverance and many other key traits. And oftentimes it takes something else – financing.

While the vast majority of small businesses face challenges with financing, female-owned businesses have had a particularly difficult time even though women-owned firms grew at 1.5 times the national average in the seven years through 2014, according to a report by American Express Open.

Since the mortgage meltdown, bank financing for female-owned small businesses has shrunk dramatically, according to the California Reinvestment Coalition.  However, new funding options are now available to help small businesses.

In order to improve the odds to find the best solution for your business, try following these tips:

Do Your Research

While practically everyone you meet will offer their advice, it’s far better if you have a clear understanding of what is available. You know more than anyone else about what your business needs. You may miss out on the best type of loan if you don’t understand your choices. At this stage, look into a wide variety of financial companies beyond the most obvious – your local bank.  You may be better off with an alternative lender who can provide flexible options that work for your unique business.

For information specific to women owned businesses, the U.S. Small Business Association’s Women’s Business Centers represent a national network of nearly 100 educational centers throughout the U.S. and its territories. These centers have comprehensive information on the many types of available financing.

Another great resource to get an initial understanding is the National Association of Women Business Owners which has chapters across the U.S. with a wide range of resources for women-owned business owners, including publications and programs on financing.

Be Prepared

You will need to have your documentation ready before applying with any lender. That may include financial and bank statements for your businesses and personal accounts, income taxes and other essential information. Also remember, documentation requirements vary depending on the loan amount and lender.

While traditional financial institutions often require three years of financials, alternative lenders generally don’t require as much paperwork, as you’ll typically need three months of bank statements and credit card sales records for a pre-approval. That’s because alternative lenders are providing capital for a much shorter time period (months) rather than your local bank (years), and are likely to work with businesses in earlier stages of development, 1 year+ vs. 5 years+.

You should also consider that while banks often avoid sectors they consider too risky – such as restaurants – alternative lenders, such as BFS Capital, are far more open to working with different types of businesses.

If you apply to larger financial institutions, you will likely be required to have collateral to secure your loan, you will have to fill out a lot of paperwork and may end up waiting months for a decision. With alternative financing companies, your rate will be higher, however the hoops you have to jump through will be far less including paperwork, and access to capital in as little as 48 hours, as opposed to three months at a financial institution.

Narrow the Options

Once you identify the type of loan that best suits your business needs, you can choose who you want to work with. That’s why you need to do your homework before submitting applications. What you don’t want to do is apply to a number of different places because your business’ credit report is pulled each time you submit an application, and that’s subsequently reflected in your credit history and score.



  • The SBA has a number of programs targeted to women owned business and is a great resource for learning about financing information.
  • The National Association of Women Business Owners is one of the best organizations to get information for women owned businesses at any stage.
  • Business News Daily features a primer on various types of small business loans to help get you started with your research.