SBA Loans for Women Explained

Learn how the Small Business Adminisitration (SBA) can assist you in your loan process.
Paperwork for an approved business loan.

The Small Business Administration (SBA) provides many financial assistance program resources. While the SBA does not lend directly to anyone, SBA loans for women offers financial products that are guaranteed by the SBA for financial institutions. Therefore, funding for women is more easily obtained, since the loans are first approved through and by the SBA.

Applying for SBA Loans

Women may apply for loans through the SBA in the same way as a regular small business would apply, either through a commercial bank, or a local, regional or national financial institution.

Loan requests through the SBA are evaluated in a similar fashion as other typical lenders. The major benefit with SBA loans for women is that the guarantee reduces the liability associated with the loan for the financial institution. This makes the prospect of loaning through the SBA's program very attractive to many lenders. In this way, the SBA offers a much better advantage for women to obtain funding, than if they were to apply on their own, without the backing of the SBA.

SBA Loan Offerings

In addition to information about small business loans for women, the SBA's financial offerings include information about surety bonds, equity capital topics, special purpose loans and special lender programs.

SBA loans for women also include resources from its Office of Women's Business Ownership (OWBO). The OWBO was established to administer a network of Women's Business Centers (WBCs) located in the United States and its territories.

Loan Costs

The assistance provided by the WBCs and SBA loan information focuses on economically or socially disadvantaged women, with intensive training and counseling on new business development. However, the loans are not automatically inexpensive financial products. Generally, the commercial loan interest rates tend to be offered at the same level as most financial institutions and banks. There is also a guaranty fee assessed, usually starting at 3 percent. Other considerations include a longer amortization rate than most commercial loans. Working capital loans may be financed for up to seven years, while fixed asset loans have a ten year cap. Real estate and construction for business building have a 25 year limit.

In addition to loan information, the WBC also offers data on many grant funding opportunities. Grant applications can be a complex process, and the SBA's resources serve to explain where grants may be obtained, as well as which resources are legitimate.

SBA Partners

Networking has always been an essential part of starting, growing and running businesses. As a networking tool, the SBA has extensive partnerships with many organizations that help locate specialty funding for women, such as business government loans.

Partners, such as the National Women's Business Council, offer advice and mentoring connections that can be very beneficial in learning how to understand and navigate the loan process, while choosing the best options for each particular situation.

In addition, the SBA offers educational resources, including free online courses, such as the Finance Primer: Guide to SBA's Loan Guaranty Programs, which reviews basic finance principles, helps to identify sources of capital and provides practical guidance and direct links to business finance resources. Courses taken through the SBA also offer certification, which could be helpful in attaining other revenue sources or employment.

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