Business Loans For Women

Find and compare a range of loans available for women running their own small business with Savvy today.

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, updated on July 26th, 2023       

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How do small business loans for women work?

A loan for a female-owned business is no different from any other finance deals available to SMEs across Australia. For the most part, these loans are unsecured, meaning you won’t need to put up any valuable assets such as equity in your home or your business’ equipment or machinery as collateral. Because of this, they’re more easily accessible to small businesses who perhaps don’t have the required assets to serve as collateral, as well as being faster to process.

You can generally get approved for as little as $5,000 up to a maximum of $500,000 without security, although small businesses are less likely to be approved for amounts on the higher end of the scale due to their lower turnover compared to larger businesses. You can repay this amount over as few as three months, with longer terms reaching up to five years in length. The loan amount and term your lender greenlights will depend on your business’ situation, such as its credit score and revenue.

In terms of what the money can be used on, there are essentially no restrictions (provided the money is going towards business expenses). As such, whether you’re looking to finance a storefront fit-out, inventory or even the purchase of another business, you can do it with a business loan.

How should I compare different small business loan offers for women?

There are several key factors which you should consider during the comparison process of different microloan options for women in business. The key features to keep in mind when comparing loans are:

Interest rates

The simplest way to compare business loans on offer in the market is by their interest rates, as these are almost always prominently displayed by lenders. While small differences in rates may not seem like a big deal, they can amount to savings of hundreds of dollars in reality which, if your business is dealing with relatively small turnover, can be significant. You may also be able to claim the interest portion of your loan repayment as a tax deduction, saving even more money in the process.

Available loan terms

As mentioned, loan terms can range from between three months and five years. However, this range isn’t offered by all lenders. For instance, some will raise their minimum loan term as high as six to 12 months, while others cap their maximum repayment periods at two years. It’s important to prioritise lenders who offer terms which suit your business’ cashflow needs and not compromise this, as not keeping up with repayments will affect your ability to access financing in the future.

Available loan amounts

Again, while loans can be taken out for amounts between $5,000 and $500,000, most lenders will offer their own individual borrowing range. Unsecured business loans are more commonly available for up to $250,000 to $300,000, while some lenders also raise their minimum required amount to $10,000. As such, if you need a loan on the smaller or larger end of the scale, you should always compare closely to ensure you can borrow what you need.

Repayment flexibility

Some lenders in the market offer loans without any early repayment penalties, which also may be something you look to prioritise. Paying above the minimum required amount for each instalment will not only help you shift your business debt from your books sooner, but also reduce the interest you’re required to pay. The faster your loan debt is paid down, the faster the required interest will fall. Paying off quickly can also boost your business’ credit score, making finance accessible in the future.

Eligibility criteria

Each lender will have its own eligibility criteria when it comes to accepting applications. Some of the most prominent of these which may impact your business and its suitability for a loan are:

  • Minimum turnover: as low as $5,000 per month, but some lenders will require up to $1 million per year
  • Minimum trading time: in most cases, you’ll need to have been trading for at least six months, but some specialist lenders offer loans to startups. However, some require up to 12 months of trading history
  • Credit history: lenders generally won’t approve applications for businesses and business operators who have been bankrupt in the past.

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Why compare business loans through Savvy?

Top tips for maximising your chances of business loan approval

Plan out exactly what you need and why

Creating a plan before you apply to map out the expenses which need covering will help you minimise the chances of applying for more than your business needs or can afford. Some lenders may ask for business plans, so these can come in handy here on top of revenue projections.

Show verifiable credit

Lenders will always lean more towards businesses who have not only a positive credit history but also a proven track record of repaying debts, particularly other business loans. This makes your business appear more creditworthy.

Provide loan security

If you can do so, opting for a secured business loan instead of an unsecured one can increase your chances of approval significantly. This is because lenders consider these loans to be safer, as there’s something to fall back on. They also offer lower rates and greater borrowing ranges over $1 million.

Apply with a guarantee

Having someone, such as you or another of your business’ directors, supply a personal guarantee to repay the loan should the business become unable to do so also adds an extra layer of security for your lender and can increase your approval chances.

Other common questions about business loans for women

Are there any government grants available for female-owned businesses?

Yes – there are several grants available both at federal and state levels when it comes to providing support for female-owned businesses. The Boosting Female Founders Initiative offers grants ranging from just $25,000 up to almost $500,000 to help female entrepreneurs get their startups off the ground. One state example is Women in Business NSW, which provides access to business training programs and useful resources and services.

Which documents will I need as part of my business loan application?

For loans of less than $200,000 to $250,000, many lenders will only require you to submit your business’ banking information, photo ID, your ABN/ACN and GST registration (if applicable) and records of your rent. However, for larger loans, you may be required to supply two years’ worth of business financials, which can include:

  • Tax returns
  • Balance sheets
  • Accounts receivable and payable
  • Profit and loss statements
  • A detailed business plan which projects future revenues
How quickly can my application be approved?

Business loan applications can be approved as soon as one hour after you submit them. Once this takes place and your lender ticks off on all their particulars, you can have your business loan funds advanced directly into your bank account on the same day, with some able to do so in just three hours. This makes them a viable option for business operators who need money urgently.

What type of interest rate will my business loan come with?

In almost all cases, microloans for women in business will come with fixed interest rates. This enables operators to approach their repayments with greater certainty around how much they’ll need to repay each month or year. This is because these rates are locked in and don’t fluctuate over your loan term.

Will I be able to refinance my business loan down the track?

Yes – business loan refinancing is a process whereby you take on a new loan to pay out your existing finance deal. This may be for a variety of reasons, such as to take advantage of a lower interest rate or an improved credit score, consolidate business debts or increase your loan amount by borrowing against your business’ equity.

Should I use a line of credit or overdraft instead?

You could – lines of credit and overdraft facilities are both flexible business financing options which you may find are better suited to your needs. Both of these finance types allow you to be approved for a set limit and withdraw up to that amount whenever you like. You’ll only have to pay interest on the amount you use, also, albeit typically at a higher rate. Additionally, overdraft facilities, which are attached to your business bank account, don’t have any set repayments.

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