Business loans for women

    Add a header to begin generating the table of contents
    Chris Godfrey

    Page written by Chris Godfrey. Last reviewed on October 11, 2023. Next review due April 6, 2024.

    Despite increasing since 2016, female business ownership in the UK is still out of balance to the population’s composition. Females make up more than 50% of the UK’s 67 million citizens, but less than a third of UK SMEs are currently owned by women, and a lack of funding to female entrepreneurs to support startups, fuel expansion plans, and buy property and equipment, is named as a key reason business ownership by women is so low. Fortunately, this situation is changing, as more independent lenders are joining the UK business lending market and making more funding available for women entrepreneurs to close down the gender-finance gap.

    But what kind of loans can female business owners secure? What are the application processes? And what can these loans be used for? Read on to find out more about business loans for women and why they are so important to the nation’s economy.

      Add a header to begin generating the table of contents

      Why is business finance for women so important?

      UK productivity is reliant on the continual development and innovation of small businesses. However, only 6% of working-age women are engaged in entrepreneurial activities compared to 10% for men. Encouraging female entrepreneurs to apply for business finance to support start-ups and drive business expansion can help to end male dominance in commerce, incentivise more women to start their own businesses, and help to grow the UK’s vibrant small business sector.

      Business grants exclusively for women

      Business grants are provided by local and national government and some foundations and charities, with some operating grant programmes exclusively for female business owners and entrepreneurs. The best thing about a grant is that is effectively free money, as grants do not need to be repaid like a loan. 

      Where to find business grants for women

      What are the top networks for female business owners?

      Networking, advice, opportunities and more for female entrepreneurs

      From the Women Angel Investment Taskforce – angel investors for businesses led by women

      Connect with other business-minded women across the UK

      Business women supporting business women

      Networking, workshops, tutorials, introductions and more

      The place to start your sustainable, social enterprise

      What are the traditional funding options available for women?

      Business loans for women come in all shapes and sizes. Some finance may be obtained without security, whilst others may require the borrower to provide sufficient collateral or at least a personal guarantee.

      Popular forms of business finance for women:

      Startup loans

      If you’re launching a new business, you may be eligible for a startup loan – this is seed funding to get a new venture up and running. As well as private lenders, Government funds are also available for this type of loan. Security may be required.

      Working capital loans

      Working capital loans pay for expenses like wages, fuel bills, stock and raw materials and more. In some cases, added security may be required.  

      Working capital loans for female business owners include:

      Works like a traditional bank loan. Borrow from £1,000 to £500,000. Repay the loan in a few months or over several years. Security may or may not be required.

      Stop waiting 30, 60, 90 days or more for customers to pay their bills. Receive the cash tied up in your outstanding invoices as soon as you raise them. You retain control of your sales ledger. Clients need never know you are using your invoices to raise funds. No added security required.

      Works like a standard bank overdraft. Dip into an agreed credit limit as and when you need funds, then pay the loan back as your business revenues come in. Security may be required.

      Businesses that accept customer credit and debit cards can borrow against the value of their card sales. As your card sales increase, your borrowing limit goes up. Pay the loan back with a fixed percentage of your card sales. No added security required.

      Business credit cards work the same as personal credit cards, but are in the name of the business, not an individual. Business cards typically have a higher credit limit than personal accounts and higher interest rates than other forms of business borrowing. Security may be required. 

      Loans to cover expansion costs

      Cover the costs of your business expansion with a development or bridging loanUse the funds to pay for refurbishments and extensions to your operating premises. Borrow up to 90% of the project cost. Repay the funds over 1 – 30 years. The property acts as security for the loan.

      Buying equipment such as vehicles, plant, and machinery

      Vehicles and major pieces of equipment can be expensive and buying them with cash can seriously hurt your cashflow. However, asset finance can absorb the financial impact. Purchase work vehicles like cars, vans, or plant and machinery over time. Use the equipment as you pay for the equipment. In most cases, the asset acts as security for the loan.

      Franchise finance

      Joining a franchise can allow female entrepreneurs to become part of a well-known brand, enjoy centralised marketing support, and have fast access to products and equipment. However, buying into a major franchise group can be expensive, and few franchisors offer funding to cover the start-up costs. A franchise loan allows you borrow from £1,000 to £5million to get you on the franchise ladder. Security may be required.

      VAT loans

      Paying your VAT bill late can leave you facing penalties and interest from HMRC. VAT loans are designed to help you pay your tax on time. Avoid penalties and give your business cashflow a boost. The lender pays HMRC direct. Repay the loan over 3, 6, 9, or 12 months. Security may be required.

      Business grants

      Business grants are provided by local and national government and some foundations and charities. This is effectively free money, as grants do not need to be repaid like a loan. However, there is usually stiff competition for grants, the application process can be slow and difficult, and the pool of available money is usually limited, which can restrict the amount of cash you may receive.

      Business loans for women eligibility requirements

      Eligibility requirements may vary depending on the type of business loan you apply for. However, in most cases, applicants must be:

      • A female business owner – UK resident
      • At least 18 years of age
      • The business must be UK registered
      • Trading for at least 6 months
      • Have a minimum monthly or annual turnover that can vary according to loan type and the sum you are seeking to borrow
      • You may also be asked to provide security, such as a lien on company assets or on business or personal real estate

      The application process

      Many lenders offer ‘one-size fits all’ generic business loans for women, and a fast application process that gives you an initial ‘yes’ or ‘no’ in minutes. However, as you can see from the menu of business loans for women above, there are many ways to borrow the immediate funds you need, and some types of loan may work better for your organisation than others. 

      You can start the process to find out which type of borrowing is best for you here. It’s still a fast application, but now you get to choose a business loan that’s expertly tailored to your business. 

      Top tip: Lenders will typically check the credit status of the business, and the business owner(s). Don’t get caught out by an error on your credit records. Check your personal as well as your business credit score before applying for a loan.

      What documents may you need?

      Different lenders have different criteria, but it may make the process easier if you have this information available:

      • Business details – address, contact details, length of time trading, etc.
      • Cashflow forecast
      • Balance sheet
      • List of major customers and suppliers
      • List of any existing business debts

      What can the loan be used for?

      Business loans for women can be used for almost any commercial purpose:

      • Boost your working capital to cover cashflow fluctuations
      • Expand your operations
      • Buy equipment and raw materials
      • Secure bulk-purchase savings on inventory
      • Cover wages, rent, utilities, business rates, and unexpected emergencies
      • Pay your VAT bill
      • Pay suppliers quickly to secure early-payment discounts

      What are the benefits of using business loans for women?

      Business loans for women are designed to support the specific needs for female entrepreneurs, providing benefits and terms and conditions that fit their business circumstances:

      • Get a loan to match your needs

      Borrow from as little as £1,000 all the way up to £5 million. Get a loan that supports your business ambitions.

      • Lower interest rates

      Females tend to be more reliable when borrowing money and have a lower average default rate than men. This may be reflected in a lower interest rate and cheaper cost of borrowing.

      • Fast approval process

      Many business loans for women require a ‘low-doc’ application process and streamlined loan set-up. This means you can be approved quickly and in some cases, have the funds in your business bank account the next day.

      • Access to extra working capital

      More UK SMEs go bankrupt due to poor cashflow than any other reason. Fast and simple business loans for women can put an end to cashflow anxiety – pay your bills on time, take advantage of sudden opportunities.

      • Maintain ownership

      Unlike with most invested capital, you are not required to relinquish any ownership with a business loan. Keep control of your company and decide for yourself how you use the borrowed funds.

      • Easy repayment schemes

      Choose to repay your loan in regular instalments, or as a percentage of your turnover. Know in advance what you must pay to maintain stable cashflow. Pay your loan back over months or several years.

      Get started with Swoop

      Don’t let funding issues nip your ambitions in the bud. Register your business with Swoop to find the business loan for women you need to make your company thrive. 

      Written by

      Chris Godfrey

      Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.

      To read our editorial policy, please click here.

      Article sources
      collapse expand

      Swoop requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.

      17% in 2016: https://ueni.com/blog/report-gender-small-business-female/

      30% of businesses owned by women: https://www.simplybusiness.co.uk/knowledge/articles/2023/03/only-a-third-of-uk-small-business-owners-are-women/

      UK population statistics: https://datareportal.com/reports/digital-2023-united-kingdom

      Asset finance: https://swoopfunding.com/business-loans/asset-finance/

      Development loans: https://swoopfunding.com/uk/commercial-mortgages/development-finance/

      Bridging finance: https://swoopfunding.com/uk/commercial-mortgages/bridging-finance/

      Franchise finance: https://swoopfunding.com/uk/business-loans/franchise-finance/

      Start-up loans: https://swoopfunding.com/start-up-loans/

      Gov start-up loans: https://www.startuploans.co.uk/?_ga=2.216715862.11597993.1600061521-564792455.1598443977

      Working capital loans: https://swoopfunding.com/uk/business-loans/working-capital-loans/

      Small business loans: https://swoopfunding.com/uk/business-loans/small-business-loans/

      Revolving line of credit: https://swoopfunding.com/loans/revolving-credit-facility/

      Business credit cards: https://swoopfunding.com/uk/business-credit-cards/

      VAT loans: https://swoopfunding.com/uk/business-loans/vat-loans/

      Invoice finance: https://swoopfunding.com/uk/business-loans/invoice-finance/

      Merchant cash advance: https://swoopfunding.com/uk/business-loans/merchant-cash-advance/

      Business credit score: https://swoopfunding.com/uk/business-credit-scores/

      WIBN: https://wibn.co.uk/#

      Women backing women: https://ukbaa.org.uk/our-programmes/women-backing-women/

      Female business network: https://femalebusinessnetwork.co.uk/

      Women’s chapter: https://womenschapter.com/

      Allbright:

      Bloomsbury beginnings: https://bloomsburybeginnings.org/

      G
      E
      T

      Q
      U
      O
      T
      E

      Ready to grow your business?

      G
      E
      T

      Q
      U
      O
      T
      E

      Clever finance tips and the latest news

      delivered to your inbox, every week

      Join the 70,000+ businesses just like yours getting the Swoop newsletter.

      Free. No spam. Opt out whenever you like.

      We work with world class partners to help us support businesses with finance

      close
      Looks like you're in . Go to our site to find relevant products for your country. Go to Swoop No, stay on this page