Starting a small business is a challenging undertaking for anyone, but women often face unique obstacles. Women generally encounter more difficulty than men in getting familial support, growing their networks, overcoming systemic biases, and securing funding. Yet, with small businesses accounting for 99.9% of all U.S. businesses, it’s more important than ever that women start and grow businesses that will fortify the foundation of our economy.

Amelia Earhart once said, “The most difficult thing is the decision to act, the rest is merely tenacity.” If you have a business idea but have hesitated due to a lack of funds, now is the perfect time to explore the availability of small business loans for women and learn how to use them to build the businesses you’ve envisioned.

Key Considerations

Despite owning 43.2% of small businesses and generating $388.1 billion in revenue in 2023, women received only 2.4% of venture capital funding and 28.4% of SBA 7(a) loan funding, highlighting the significant funding gap and the need for increased financial support for female entrepreneurs.
Women face unique challenges in starting and growing  businesses, including biases and funding difficulties, but small business loans, grants, and supportive programs can empower women to overcome these barriers.
Female entrepreneurs can use small business loans for various purposes, such as acquiring a business, expanding operations, buying out a partner, purchasing real estate, or refinancing debt, thereby fueling business growth and stability.

Women business loan statistics

While women in business have come a long way, there is still plenty of room for improvement. Although women make up slightly over half of the U.S. population, their representation in business remains much lower. The following stats speak to the state of women-owned businesses in America.

43.2% of small businesses are women-owned, and they generated $388.1 billion in revenue in 2023, according to the National Association of Women Business Owners (NAWBO).
Despite the high percentage of female-owned businesses, only 2.4% of venture capital funding is given to female founders.**
In 2023, the Small Business Administration (SBA) issued only 28.4% of its $27 billion in SBA 7(a) loan funding to women-owned businesses.†
Women face additional responsibilities that impact their company, with 31% of female business owners having school-aged children and 30% reporting having to scale back time on their business because of childcare needs.††
In addition to getting limited funding overall in 2023, women are also less likely to receive the full amount of loans they requested, with 45% of women-owned businesses getting full loan approval vs. 55% of those owned by men.†††

These statistics highlight the significant funding gap and the unique challenges women entrepreneurs face. Despite these hurdles, numerous opportunities exist for women to secure business loans and use them to create successful ventures.

How can women leverage business loans?

Now is the best time in history for women to start a business, thanks to the abundant resources available to and support for female business owners. Companies like BHG Financial are committed to furthering female entrepreneurs by partnering with organizations that elevate women leaders in business and providing loans at favorable rates that help companies grow and scale in many ways. Here are five ways a female entrepreneur can take advantage of a small business loan.

Acquire a new business

Sometimes, the most direct route into entrepreneurship is buying in to an already established business. Whether it’s an independent business or a franchise, a small business loan can help women purchase their desired business. In addition to the acquisition, a loan can help you make any necessary changes once the firm is within your control, like changing vendors, upgrading technology, or creating a new marketing plan.

Grow and scale existing operations

Expanding an existing business looks different for each owner, but you could use a business loan to:

Hire talent in key roles
Renovate your physical space
Increase your inventory to meet higher demand
Enhance marketing efforts by expanding into new channels
Upgrade equipment
Expand your product line to serve new customers
Find new markets, whether domestic or international
Build a stable emergency fund
Craft a differentiated online presence through a website revamp or brand refresh

Buy out a partner for sole ownership

If you’re currently operating in a partnership, a loan can give you more resources when buying out a partner from your existing business venture. Before you consider buying out a business partner, it’s essential to consult with an accountant and attorney to consider the far-reaching implications of the decision.

Obtain real estate

Buying a physical space for your business can be a massive investment in your company’s future. Depending on the real estate you choose, you may need to make major renovations to make it workable. For example, if you plan to open a restaurant but the existing space isn’t set up for a commercial kitchen, the business loan could help you buy the space and finance the kitchen construction. 

Refinance debt

If your business has a credit card or other high-interest debt, a small business loan could be used to pay off and consolidate those debts at a more favorable interest rate. The increased cash flow following consolidation can enable you to focus on expanding the business in other ways.

Alternatives to small business loans for women

If you’re interested in securing funding for your business venture but aren’t sold on the benefits of a small business loan, there are other options to explore.

Apply for grants

If you’ve exhausted loan options or cannot take on more debt currently, learning the similarities and differences between grants and loans may be a good next step. Grants are available specifically for female business owners and are offered through independent companies and some government agencies. The primary benefit of securing a grant through a platform like the  Amber Grant from WomensNet is that you won’t need to pay anything back. You’ll need to go through an application and screening process, but if you’re awarded the grant, it’s a gift to your business with no strings attached.

Consider crowdfunding

Crowdfunding through a platform like IFundWomen is an opportunity for female business owners to present their ideas to the world and receive funding from friends, family, peers, and strangers. According to a study published in Science Direct, women receive 61% more in pledged funds than their male counterparts, independent of the campaign goal.‡6 If you’re selling a physical product and are looking to gauge market interest before launching, crowdfunding is a great option to consider.

Why women should consider a small business loan from BHG Financial

BHG Financial is proud to support female entrepreneurs with business loans up to $500K1,2. Our business loans allow you to explore new business opportunities or expand your existing operations, and longer repayment terms of up to 12 years1 give you affordable, predictable monthly payments to alleviate some of the stress business ownership brings. It’s easy to get started by viewing your monthly payment estimate.

Small business loans for women FAQs

What options do women have to help them start a business?

Women can get money to start a business through various options, including small business loans, grants, and venture capital. Many programs specifically support female entrepreneurs to help them launch and grow their businesses.

How hard is it for a woman to get a business loan?

While there are challenges to overcome, numerous programs prioritize supporting women entrepreneurs in accessing business loans. With preparation, a solid business plan, and resources like women-focused business networks and financial institutions, obtaining a business loan can be feasible and empowering for women.

Not all solutions, loan amounts, rates or terms are available in all states.

¹Terms subject to credit approval upon completion of an application. Loan sizes, interest rates, and loan terms vary based on the applicant's credit profile.

²Personal Loan Repayment Example: A $59,755 personal loan with a 7-year term and an APR of 17.2% would require 84 monthly payments of $1,228.

³ There is no impact on your credit for applying. For personal loans, a complete credit history, which will appear as an inquiry on your credit report, will be performed upon acceptance and funding of the loan and may impact your credit.

No application fees, commitment, or impact on personal credit to estimate your payment.No application fees, commitment, or impact on personal credit to estimate your payment.

Consumer loans funded by Pinnacle Bank, a Tennessee bank or County Bank. Equal Housing Lender.

For California Residents: BHG Financial loans made or arranged pursuant to a California Financing Law license - Number 603G493.