SBA Loans and Grants for Women Business Owners
Although women are providing substantial contributions to the small business world, they still face profound challenges. For example, many women entrepreneurs struggle to locate additional business financing so that they can grow their operations.
The Small Business Administration, commonly referred to as the SBA, is considered a key resource for small business owners. One of their main areas of focus is helping women business owners achieve their goals. Their impressive initiatives, such as the Office of Women’s Business Ownership, have created opportunities for both women-owned startups and existing business.
If you need additional financing to support your woman-owned business, keep reading to learn more about the types of SBA loan and grant options, how to apply, and what the typical qualifications are.
Is an SBA Loan Right for Your Woman-Owned Business?
What Are the Types of SBA Loans for Women?
The SBA offers a variety of diverse programs specifically designed to help women-owned small businesses. These include:
- Women’s Business Centers: The SBA has over 100 Women’s Business Centers throughout the U.S. Among these center’s initiatives is their commitment to connecting women-owned businesses with capital. To find a center near you, click here.
- InnovateHER Challenge: Each year, the SBA provides financing to businesses that benefit women. In fact, in 2017, the winner was awarded $40,000! To enter, you’ll first need to win a local InnovateHER Challenge. Once you do this, you’ll advance to the national level.
- Women-Owned Small Business Federal Contracting Program: This program helps woman-owned businesses win Federal contracts. To qualify, your business must be at least 51 percent owned by one or more women. You’ll also need to go through a self-certification process. To learn more about what it takes to qualify for this program, visit the SBA website.
- Small Business Innovation Research and Small Business Technology Transfer Programs: Does your business involve federal research and development? If so, you could be eligible for Small Business Innovation Research and Small Business Technology Transfer Programs.
- 8(a) Development program: The SBA 8(a) Business Development Program enables “small, disadvantaged businesses compete in the marketplace.” As a woman entrepreneur, you could qualify, so consider applying for this program.
- SBA Loans: The SBA offers small business loans for women, in addition to financing options for entrepreneurs in general. To learn about the SBA’s different loan programs, check out our overview here.
Who Qualifies for SBA Loans and Grants for Women?
To qualify for women business financing, you’ll need a favorable personal and business credit score. Before you apply, it might be beneficial to review your credit report to see if you meet the lender’s score requirements. In addition, you’ll need a well-written business plan. This plan should outline income and expense projections, in addition to historical trends on your annual revenue.
As part of the underwriting process for SBA loans, you’ll also need to explain how you’ll utilize the working capital, and possibly create a 5-year revenue and expense projection estimation. For example, will you use the money for operational costs, such as marketing or payroll, or will you use it for collateral such as equipment or real estate?
However, you plan to utilize the term loan could affect your ability to qualify. In general, asset-based requests are more secure. This is because the equipment or real estate you plan to purchase can be used as collateral.
If you run a nonprofit organization, it’s important to note that you won’t qualify for SBA loans.
How to Apply for SBA Loans
Applying for a business loan or grant through the SBA can be a challenging endeavor, no matter who you are. If you’re a woman starting a new business or are trying to grow an existing company, start your application process by locating a lender in your area that works with the SBA.
Invest in Your Women-Owned Business
Overall, the SBA gives female entrepreneurs many options for business loans and grants. However, they aren’t the only resource available. Many financial institutions provide financing for woman-owned businesses as well. Whether you choose to grow your business with an SBA loan or grant or with an alternative lender, be sure to ask about special initiatives for women-owned businesses.
Editor’s Note: This post was updated for accuracy and comprehensiveness in April 2019.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.