Access to capital has had a history of uneven distribution, and women entrepreneurs still face challenges when it comes to borrowing—from the path to getting approved to the network of support around them. Knowing which programs to target, how to prepare, and where bias can still occur can make a big difference for women entrepreneurs. Below, we’ll cover the landscape of women’s small business loans: what they are, their challenges and opportunities, and practical routes to funding.

What’s in this article?

• What are women’s small business loans?
  
• Why do women-owned businesses face unique financing challenges?
  
• What types of small business loans are available for women entrepreneurs?
  
• What are the advantages of loans customized for women-owned businesses?
  
• What challenges do women face when applying for loans?
  
• What role does the SBA and government support play in women’s business financing?
  
• How do community lenders and nonprofit programs support loans for women’s small businesses?
  
• How Stripe Capital can help
  

What are women’s small business loans?

Women’s small business loans usually refer to mainstream financing options that women entrepreneurs can access. These types of loans can include government-backed loans, bank loans, online loans, and microloans. By law, lenders in many countries can’t restrict or grant credit based on gender.

So, why is this distinction important? While women entrepreneurs in the US are launching businesses at record speed, they still receive less business funding compared with men entrepreneurs. That gap has given rise to targeted programs and initiatives designed to improve women’s access to funding, connect them with lenders, and add resources such as mentorship or training alongside capital. There are now a variety of government, nonprofit, and community-based programs with the goal of helping women founders get approved and funded.

Why do women-owned businesses face unique financing challenges?

Women entrepreneurs still encounter obstacles when it comes to funding. The financing gap is shaped by history, structural disadvantages, and persistent bias.

In the US up until the late 1980s, for example, some state laws still required a male relative to co-sign a woman’s business loan application. While those particular barriers are gone, their effects linger. One recent analysis found that women-owned firms in the US were charged interest rates averaging 2.38 percentage points higher than comparable businesses owned by men, despite no higher default risk.

These factors contribute to a cycle of fewer approvals, smaller loans, and higher costs. Unsurprisingly, many women opt out of the process altogether. In the UK, 79% of women entrepreneurs report leaning on personal savings to finance their companies. While personal funding can keep businesses afloat, it can also limit growth and put personal finances at risk.

The picture is starting to shift with more government-backed lending to women and more programs pushing lenders to rethink their criteria. But until systemic gaps close, women entrepreneurs still face an uphill battle to secure the same financing opportunities as men entrepreneurs.

What types of small business loans are available for women entrepreneurs?

There isn’t a separate class of “women-exclusive” loans. Women entrepreneurs apply for the same mainstream products as everyone else. Here are the main options.

Government-backed loans

Many governments have loan programs that come with favorable rates and long repayment terms because the government guarantees a portion of the loan amount. There are often flexible rules on how the funds can be used.

Traditional bank loans and lines of credit

Banks remain the gold standard for low-cost financing, but they also have the strictest requirements: strong personal credit, stable revenue, and at least a couple of years in business.

Online and alternative lenders

Digital lenders are making up for the shortfall that banks leave. They typically move faster, sometimes approving and funding within days, and have looser requirements. The trade-off is higher costs. Some use revenue-based financing, which bases offers on sales data instead of credit scores. That means businesses without collateral or lengthy histories can still qualify, with repayment tied to daily sales.

Community lenders and microfinance programs

Community Development Financial Institutions (CDFIs), credit unions, and nonprofit programs specialize in smaller loans—often between a few hundred dollars and $50,000. They tend to assess beyond credit scores and weigh character and business potential. These loans often come with technical assistance, such as mentorship, business training, or help managing finances—which makes them especially valuable for early-stage entrepreneurs.

Women entrepreneurs have access to the full spectrum of small business loans, from government-backed programs to bank lines of credit to microloans. But women-owned businesses often need to work harder to find lenders and programs that actively support women founders.

What are the advantages of loans customized for women-owned businesses?

Most loan products aren’t exclusive to women, but many programs layer on resources that can make a real difference. Some lenders and community programs actively set aside funds to support women founders, which can translate into higher approval odds. Some nonprofit and government programs pair financing with mentorship, training, or networking opportunities.

The main advantage of loans that provide this type of support for women is the ecosystem that comes with it. Being part of this type of lending program can help a business stand out in competitive markets and signal credibility to partners, customers, and investors. And working with a program that includes support beyond financing can help women-owned businesses use their capital more effectively.

What challenges do women face when applying for loans?

Even as capital is more accessible now for women-led businesses, the loan process itself can still be difficult to navigate. Some hurdles are structural, while others are tied to bias, but all can affect approval odds and loan terms.

• Collateral requirements: Many lenders want hard assets as security for loans, such as real estate, equipment, or sizable deposits. Globally, women are less likely to have access to these, which can weaken applications.

• Biased underwriting: Research in the US shows women-owned firms with comparable credit risk to men’s businesses are still charged higher interest rates. That makes funding costlier and harder to scale.

• Application fatigue: Faced with these barriers, some women might hesitate to apply at all. A 2024 survey showed that a majority of UK women entrepreneurs fund their companies with personal savings.

The good news is that preparation and persistence matter. A strong business plan, organized financials, and knowing which lenders actively support women founders can help significantly.

What role does the SBA and government support play in women’s business financing?

The Small Business Administration (SBA) is an important source in securing capital for many women entrepreneurs in the US. The SBA doesn’t lend money directly, but it guarantees loans made through banks and community lenders, which reduces risk for the lender and opens more doors for borrowers. In 2023, about a third of SBA loans went to women-owned businesses.

Key SBA programs include:

• 7(a) loans: These loans are up to $5 million, and they cover a wide range of needs, including working capital, expansion, equipment, or refinancing.

• 504 loans: These are long-term financing for major fixed assets that promote business growth and job creation, such as real estate or heavy equipment. The maximum amount is $5.5 million.

• Microloans: These are smaller loans of up to $50,000, issued through nonprofit intermediaries and often paired with business coaching.

Beyond lending, the SBA invests in resources tailored to women. Its Office of Women’s Business Ownership oversees a nationwide network of Women’s Business Centers (WBCs), which provide free or low-cost training, mentorship, and help with the loan process. There’s also the Women-Owned Small Business (WOSB) Federal Contract program, which helps certified firms compete for federal contracts.

Government programs have the power to expand access, lower borrowing costs, and connect women with a broader ecosystem of support.

How do community lenders and nonprofit programs support loans for women’s small businesses?

Not every entrepreneur fits a bank’s checklist. That’s where community-based lenders and nonprofits can be especially useful. CDFIs, credit unions, and microfinance groups focus on making capital accessible to those who might otherwise be overlooked.

These types of loans are typically smaller (anywhere from a few hundred dollars up to $50,000), but they come with personal guidance. Many community lenders pair financing with hands-on support—such as business training, mentoring, or help with building credit—that strengthens long-term success.

Because their underwriting standards go beyond credit scores, these types of lenders are typically more open to evaluating the character and potential of an entrepreneur rather than just financial history. That makes them an important bridge for women starting out with limited collateral or shorter track records. These lenders provide partnership as well as funding, and they can help women business owners create a sturdier foundation for growth than money alone.

How Stripe Capital can help

Stripe Capital offers revenue-based financing solutions to help your business access the funds it needs to grow.

Stripe Capital can help you:

• Access growth capital faster: Get approved for a loan or merchant cash advance in minutes—without the lengthy application process and collateral requirements of traditional bank loans.
  
• Align financing with your revenue: Stripe Capital’s revenue-based structure means you pay a fixed percentage of your daily sales, so payments scale with your business performance. If the amount that you pay through sales doesn’t meet the minimum due each payment period, Capital will automatically debit the remaining amount from your bank account at the end of the period.
  
• Expand with confidence: Fund growth initiatives such as marketing campaigns, new hires, inventory expansion, and more—without diluting your equity or personal assets.
  
• Use Stripe’s expertise: Stripe Capital provides custom financing solutions informed by Stripe’s deep expertise and payments data.
  

Learn more about how Stripe Capital can fuel your business growth, or get started today.