Financing is a significant pain point for small-business owners, and if you’re a woman, your options might be even more limited. Women own 30% of U.S. small businesses but receive just $1 of every $23 in small-business financing, according to the Senate Committee on Small Business and Entrepreneurship.
There are small-business loans specifically to help women-led ventures flourish. But entrepreneurs who have a few flaws in their credit history often struggle to get the capital they need. Alternative lenders can help people with poor credit establish and grow their businesses. These lenders generally have fast application processes and are quick to send funding — but APR varies widely, and sometimes reaches upward of 100%.
Here are options that can help with your financing needs, even if you have a less-than-stellar credit score. To keep costs down, apply for the loan with the lowest borrowing costs you can qualify for.
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For newer women-owned businesses
For women-owned businesses looking to grow
For women-owned businesses that need quick cash
For women-owned businesses with outstanding invoices
For women starting a business
Small-business lending has yet to bounce back to pre-recession levels, making access to startup capital from banks scarce at best. Because of this, if you have a poor credit history, funding your venture with a credit card might be your best option.
But shop smart for the best credit cards:
Compare all business credit cards
For newer women-owned businesses
When you’re trying to become a contender in your industry but are still finding your footing, peer-to-peer lender StreetShares may be an option. The company uses “affinity-based lending” to connect business owners with investors that have similar characteristics. For women, that means being connected with female backers, a method the company says helps to generate lower interest rates for borrowers.
You must have been in business at least one year and have an annual revenue of $25,000 to qualify for term loans with APRs from 8% to 40%. Lending amounts are on the low end, however. Although the company offers loans up to $100,000, you can only borrow the equivalent of 20% of your annual revenue. The small amounts make this option more appropriate for a new business looking to establish itself than for an older company looking to expand.
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Before you apply for a StreetShares loan, find out whether you meet the lender’s minimum qualifications.
StreetShares is currently unavailable to borrowers in North Dakota or South Dakota. Do I qualify? ▾
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For women-owned businesses looking to grow
When your business is growing, you might want capital to purchase more inventory, make renovations or support increased labor costs. OnDeck offers term loans and a business line of credit that can help cover those expenses. And the lender’s looser requirements make a bad credit score less likely to affect your chances of qualifying.
An added bonus? The application process is quick and simple, and funds hit your account in as little as 24 hours. OnDeck requires at least one owner with a personal credit score of 500 or higher for term loans and 600 or higher for lines of credit.
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Before you apply for an OnDeck loan, find out whether you meet the lender’s minimum qualifications.
Do I qualify? ▾
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For women-owned businesses that need quick cash
When your computer crashes or the holiday season sparks an uptick in inventory needs, a cash loan from Kabbage is one option. The lender considers not only your credit score, but also accounting, banking and e-commerce data when reviewing your application, making it a good alternative for business owners with poor credit. However, Kabbage loans also have high APRs: 32% to 108%.
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Before you apply for a Kabbage loan, find out whether you meet the minimum qualifications.
Do I qualify? ▾
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For women-owned businesses with outstanding invoices
When your vendors don’t pay on time, you might need funds to cover the shortfall. If you need less than $30,000, Fundbox will advance 100% of invoices that are 60 to 90 days outstanding, and you can pay it back in 12 weekly installments. The lender charges interest rates of 13% to 68%, depending on the amount of the advance.
Fundbox does not require a minimum credit score; instead, you need six months of activity in an online accounting or bookkeeping software that links with Fundbox (QuickBooks, Xero, Harvest, Freshbooks, Clio, InvoiceASAP, Sage One or Wave).
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Before you apply for Fundbox’s invoice financing, find out whether you meet the lender’s minimum qualifications.
Do I qualify? ▾
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If you need more cash, you can apply for an asset-based revolving line of credit of up to $500,000 from Dealstruck. The lender will cover 85% of invoices and leave you with some wiggle room to cover daily expenses. You’ll pay an APR of 11% to 22% plus the prime rate, and have six months to pay back the funds.
Dealstruck requires a minimum personal credit score of 600. The application process can take from two days to two weeks.
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Before you apply for a Dealstruck loan, find out whether you meet the lender’s minimum qualifications.
Do I qualify? ▾
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*Terms differ for Dealstruck’s term loans
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Find and compare the best small-business loans
If you’re still on the hunt for small-business loan options, NerdWallet has curated a list of loans to help meet business owners’ needs. We’ve gauged them on trustworthiness, market scope and user experience, and sorted them into categories based on revenue and the length of time you’ve been in business.
Compare business loansJackie Zimmermann is a staff writer at NerdWallet, a personal finance website. Email: jzimmermann@nerdwallet.com. Twitter: @jackie_zm
To get more information about funding options and compare them for your small business, visit NerdWallet’s small-business loans page. For free, personalized answers to questions about financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.
This article was updated June 3, 2016. It was originally published Dec. 4, 2015.
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