Whether you’re just starting your business or looking to expand, financing can help you get to the next level. But securing funding has long been difficult for women entrepreneurs. According to a recent report, female founders secure just 2 percent of venture capital funding and only 16 percent of conventional small business loans.
To help overcome these barriers, many organizations have created programs and lending opportunities that offer support for women-led businesses. The Tory Burch Foundation, for example, established a Capital Program that partners with community development financial institutions (CDFIs) and Bank of America to provide funding to women-owned small businesses. The CDFIs then provide mentorship and other business support services to the recipients.
Another alternative to traditional banking is crowdfunding. These online platforms allow investors to fund small business projects, reducing the need for an extensive application process. This is especially attractive for women, as they often face more time constraints when seeking funding than their male counterparts.
Women-led businesses generate $1.8 trillion in revenue and employ 9.2 million people, yet they still struggle to access enough financing. Many of the issues are related to how traditional lenders assess applications for funding. For instance, female entrepreneurs typically have lower credit scores than their male counterparts. This means they may have a harder time qualifying for business loans, which in turn can lead to higher interest rates and terms.
One option to consider is a personal loan for business, which allows you to borrow funds against your own creditworthiness and is not dependent on the size of your company. Alternatively, you could use a business credit card to finance short-term needs like payroll or inventory. These cards also often offer a range of rewards, including airline miles and cash back.
Depending on the type of funding you need, other options can include business equity, peer-to-peer lending and credit lines. These are more flexible than a typical bank loan and may allow you to pay off the debt over a longer period of time. They can also be easier to qualify for than a standard business loan.
The Small Business Association offers a variety of financing solutions, including loans for women entrepreneurs. These are government-backed, which removes some of the risk and encourages lenders to work with businesses that might otherwise be turned down for a conventional small business loan. The SBA also offers a number of women-centric grant programs.
The Amber Grant was established in honor of 19-year-old entrepreneur Amber Wigdahl, who died before she was able to turn her business dreams into reality. The grant awards an aspiring female entrepreneur $500 each month, and applicants can apply here. Other grant and financing programs for women-led businesses can be found through government agencies, private organizations and large corporations. These are usually highly competitive, but can provide a significant infusion of money for your business that you don’t have to repay. Business Loans for Women