Women-owned businesses already receive less financing than they request and are turned down more often than men-owned firms with comparable risk profiles. Now, they face an even more expensive path to credit.

The Federal Reserve raised its benchmark interest rate on September 16, 2026, its first increase since July 2023, because inflation remains above the Fed’s 2% target. Federal Reserve data shows rising rates typically make lenders more selective, not less. This compounds the disadvantage women-owned firms already carry into any credit application.

The Federal Open Market Committee voted 12-0 to raise the federal funds rate by a quarter percentage point, to a target range of 3.75% to 4%. In a statement released to media, the committee said economic activity is “expanding at a solid pace” but that inflation remains elevated relative to its goal.

“Today’s policy action will support a timelier return to the Committee’s 2% goal. The Committee will deliver price stability,” the release reads.

After more than three years without a hike and a period during which the Fed cut rates through late 2024 and 2025, rates held steady for most of 2026. It will not be the last change this year.

The committee’s updated Summary of Economic Projections shows 16 of 18 participants expect at least one more rate increase before year-end, with four of them anticipating two. Median federal funds rate projection for 2026 rose to 4.1%, up from 3.8% in the committee’s June forecast, and most analysts now expect a follow-up hike at the Fed’s December meeting.

A credit gap that was already there

Interest rate hikes have an uneven effect across the small-business economy, and gender is one of the fault lines. In a March 2025 speech , Federal Reserve Governor Michael Barr said research “consistently shows that women-owned businesses typically start with smaller amounts of initial capital compared to other firms, even when accounting for factors like education, experience, credit scores, and business characteristics such as industry and growth potential.”

The Fed’s own Small Business Credit Survey backs that up with numbers. In 2023, women-owned firms were fully approved for the loans or lines of credit they applied for just 44% of the time, compared with 54% for men-owned firms, according to Fed Communities , a Federal Reserve System publication.

That gap decreased in 2024, when women-owned firms reached a 54% full-approval rate versus 50% for men-owned firms. At the same time, women-owned businesses continue to report greater difficulty covering operating expenses. A full 28% of women-owned firms that skipped applying for financing altogether in 2024 say their aversion to debt was their primary reason.

When borrowing gets more expensive, that difference matters more. Business lines of credit, credit cards, and variable-rate SBA 7(a) loans tied to the prime rate typically move within a billing cycle or two of a Fed hike, according to financial-services analysis firm CentsIQ . Fixed-rate SBA 504 loans are unaffected.

Business owners who already rely on variable-rate debt because they were approved for less than they needed are also trying their luck with higher rates after being turned down by banks. This new hike adds a direct cost on top of an existing access problem.

Businesses already pulling back

Rate hikes typically prompt owners to delay growth decisions, and that data shows up across small-business research generally, not just among women-owned firms.

“Rising rates tend to cause business owners to delay decisions to acquire a company, invest in additional equipment, hire employees and other initiatives that help drive the economy,” Sean Kelly, a commercial banker with BOK Financial, said in a company analysis of how rate changes affect business timing.

Small-business sentiment data collected, before this month’s hike also showed that pattern. In a Q1 2026 survey by small-business lender Revenued , nearly two-thirds of owners described taking a more defensive financial posture. They’re either maintaining stability or actively cutting risk and conserving cash.

Access to capital ranked as both the top policy concern and owners named it the top forward-looking risk. One respondent said, “We have delayed expansion. It is too risky given the state of our economy. We cannot guarantee success, but the risk does not outweigh the possible reward.”

Where the response is coming from

Institutions outside traditional banks continue responding to the gap.

Community development financial institutions are mission-driven lenders certified by the U.S. Treasury, and they weigh cash flow and business plans alongside credit history. As bank credit tightens, CDFIs expand their role. The CDFI Fund’s 30th anniversary report found the sector financed more than 155,000 women-owned businesses over the prior three years.

Corporate and nonprofit capital has moved in the same direction. Hello Alice and the Global Entrepreneurship Network launched a $70 million Equitable Access Fund , backed by Wells Fargo, Mastercard and the Kauffman Foundation, specifically to expand credit access and financial education for underserved entrepreneurs with credit challenges. IFundWomen operates under the crowdfunding platform Honeycomb Credit to match women-owned businesses with grant funding rather than loans.

The Small Business Administration also targets gender-based lending gaps, and its own data shows federal-levels gaps as well. Women-owned businesses received just over 19% of SBA-backed 7(a) loans and nearly 15% of 504 loans in fiscal year 2025.

CDFIs, corporate funds, and federal targets are stopgaps, not fixes, for the widening funding gaps for woman-owned businesses. Before the end of 2026, they could get tested by a second, and possibly a third, rate increase. Women-owned businesses were already paying more for less credit, and that’s not changing on its own. This hike just raised the cost of waiting for them.