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NGExpert financial copywriter
There’s never been a better time to be a female entrepreneur. According to the National Women’s Business Council’s 2022 Annual Report, the number of women-owned businesses increased by over 16% from 2012 to 2019.
But despite the rise in women in business, finding capital is still much harder for women, which is concerning because several women-owned businesses were impacted by the COVID-19 pandemic.
Nevertheless, there are many business loan options for women. One of the most popular business loans on the market is the SBA loan. The SBA provides many resources for women entrepreneurs, and their loan products generally come with very reasonable terms.
Read on to learn more about SBA loan options for women business owners and how to apply for an SBA loan.
Page written by Zoe Weisner. Last reviewed on February 10, 2024. Next review due October 1, 2025.
Most, if not all, SBA loans are available for women entrepreneurs. The most well-known SBA loan is the 7(a) loan program, which has several different loan products within its category, such as the SBA express loan. The SBA also offers CDC/504 loans and microloans for business owners who want to purchase buildings or for startup expenses.
Below, we’ll go over each type of major SBA loan.
There are five types of SBA 7(a) loans: standard 7(a) loan, small 7(a) loan, express loan, export express, and export working capital. The standard, small, and express loan can be used for most business expenses, such as:
The primary difference between the standard 7(a) loan versus the 7(a) small loan and the express loan is the maximum loan amount and application turnaround time. The standard 7(a) loan has the largest loan limit of $5,000,000, followed by the express loan ($500,000 loan cap), and the 7(a) small loan, which has a limit of $350,000.
The express loan has the fastest turnaround time of 36 hours. Both the standard 7(a) and 7(a) small loans take between 5 to 10 days to process your application.
The export loans are designed for exporters who need funding to cover operating expenses or refinance existing debt. The SBA has a 90% guarantee on export loans.
The SBA express loan is designed for small businesses that need fast funding. As mentioned above, the SBA express loan has a maximum loan amount of $500,000 and a 50% guarantee by the SBA.
There are two types of express loans: a line of credit or a term loan. A line of credit works like a credit card—you get a limit of funds which you can draw from, and in order to re-use credit, you pay down what you owe. A line of credit loan has a maximum term of five years. For term loans, repayment ranges from 10 to 25 years. A term loan is a lump sum of money that you use all at once, such as for equipment or real estate purchases.
Interest rates for the SBA express loans vary depending on the loan size. Loans below $50,000 have interest rates of the prime rate plus 6.5%. Loans above $50,000 can expect the prime rate plus 4.5%.
The SBA CDC/504 loan is for businesses that need to purchase land, buildings, or facilities. The CDC/504 loan is available through CDCs, or Certified Development Companies. The 504 loan is a fixed-rate, long-term loan. Term lengths vary from 10 to 25 years, which is why when applying for an SBA 504 loan, lenders want to see at least two years of business history and a personal credit score of at least 660 or higher.
The SBA microloan program provides loans up to $50,000 for small businesses and not-for-profit childcare centers that need financial assistance for startup and expansion expenses. These funds can be applied to purchase inventory, supplies, equipment, or furniture needed to enhance or improve your small business. Interest rates for an SBA microloan vary between 8 to 13 percent, and the maximum repayment term allowed is six years.
The SBA microloan is available through nonprofit community-based organizations. Each of those organizations has different eligibility requirements. Because the SBA microloan is much lower than other business loans, eligibility requirements may not be as stringent. Even if you do not have a credit score of at least 700, you may be able to secure a microloan if you have collateral or strong business revenue.
To work out the monthly repayments of your loan, use our SBA loan calculator here.
There are no specific eligibility requirements for women when it comes to applying for an SBA loan. The biggest indicator of what eligibility requirements are needed to apply for an SBA loan is the type of loan you are applying for and the lender that you have selected.
With that said, there are some basic requirements that a small business must meet in order to apply for an SBA loan, such as:
Whether you’re thinking about getting an SBA 7(a) loan, CDC/504 loan, or a microloan, finding the right lender is the most important step to increasing your chances of getting the SBA loan of your choice. From credit requirements to loan structure, terms, and application requirements, not all lenders will have the same criteria. If possible, you should apply to preferred lenders.
Preferred lenders can approve loans on behalf of the SBA. Non-preferred lenders, on the other hand, have to send the loan application to the SBA for a second approval.
Lastly, though the SBA offers a free lender match tool, it is often better to work with a professional small business financing expert who has a strong relationship with an SBA-approved lender.
If you need additional support for your business, you may want to look into the SBA’s Women’s Business Centers (WBCs) or their 8(a) program. WBCs provide free counseling to women who want to launch or expand their business, and can potentially increase your odds of getting approval for a loan.
By registering with Swoop, you can discover which SBA loan is right for your business by answering a few short questions about your business. With Swoop’s digital platform and lending specialists, you can compare thousands of business loans and assess what financial requirements are needed to get access to the right funding.
Written by
Zoe is an experienced content marketer and freelance writer. For the past five years, she has written for several high-profile fintech startups such as BlueVine, Fundera, and Nerdwallet to help small business owners navigate through the world of small business financing. Today, Zoe writes about small business finance, business operations, and personal finance.
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