Securing Financing for Women-Owned Businesses - Loans and Grants for Female Entrepreneurs

Securing Financing for Women-Owned Businesses - Loans and Grants for Female Entrepreneurs

October 01, 2022

Recently I’ve been thinking back on how long I’ve been a Financial Advisor for Women and the time I’ve been advising women on loans and grants for their female entrepreneur firms. 

This is where you can see The Real Value of Working with a Female Financial Advisor helping other women succeed through Retirement Planning and Wealth Management.  

Female Businesses are Growing! 

Women-owned businesses are growing at a faster rate than any other segment of the economy. More than 10 million women-owned businesses employ over 14 million Americans, generating $1.9 trillion in annual revenue. 

Yet despite these impressive numbers, many women business owners still struggle with securing financing for their ventures because of preconceived notions about women’s inability to secure loans or other funding options due to perceived risk factors such as lack of experience or credit history issues. 

This creates both a massive opportunity for banks to enjoy funding sources from a growing segment and a challenge for strong female leadership in SMEs. There are some unique companies and organizations that can help overcome these situations with a bit of research and supported guidance.  

Is there a Funding Gap for Women-Owned Businesses? 

The short answer is yes—there is a funding gap. To date, women are more likely than men to be denied for loans and have less access to capital. They also tend to have fewer assets and resources than men, which can make it difficult for them to secure financing. 

As of right now, women-owned businesses account for only 4.4% of the total dollars lent to small business owners. That ends up being $23 borrowed for every $1 going to a woman. 

It wasn’t so long ago that if a woman wanted to secure a loan or even a credit card, a male relative like a husband, father, or brother would have to co-sign the lending documents. Meanwhile, in today’s era, women are responsible for starting 1,817 new U.S.-based businesses every day. 

Tips for Female Entrepreneurs to Secure Financing Safely and Intelligently 

If you're looking for financing to grow your business, there are many options available. One of the best ways to secure money for your company is through a loan. However, before you apply for a loan, it's important that you know what kind of financing will help you achieve your goals and that can be repaid over time. Here are some tips to help you consider your options. 

1 - Avoid Personal Credit

While it may be tempting to use your personal credit card to purchase supplies, this is one of the worst things you can do. If your business fails and you are unable to pay off the debt, your personal credit score will suffer. In addition, if you miss payments on billings from suppliers or other businesses that provide services for your company, they could sue you. This can also negatively impact your personal credit score and make it harder for you to obtain financing in the future. 

2 - Consider All Funding Options

As a woman-owned business, you may find the traditional lending sources reluctant to work with you. If this is the case, don’t be afraid to look outside of the bank for financing. Look for alternative financing sources such as venture capital firms, angel investors, and crowdfunding campaigns. You can also use your network and ask friends or family members if they know someone who might be interested in providing capital for your business idea as well as asking suppliers and customers if they would like to partner with you on a new project or product line. 

3 - Network, Network, Network

The best thing you can do is learn from other entrepreneurs and women business owners. Talking to people who have been in your shoes will help you understand what to expect, how to deal with challenges, and how to manage success. 

4 - Study Business Financing

Business credit is a record of your ability to repay debts. If you have business credit, it means that a lender will look at your financial history before deciding whether to lend you money. Take your time to study this element and all the factors you can improve upon to make you a more attractive business lender.

5 - Build Relationships

Talk to your suppliers. You might be surprised at how much they can do for you. Suppliers are often willing to partner with you and offer financing options, including discounts on products, delayed payment terms, and even loans with no collateral needed. In fact, some suppliers have even created their own programs that are specifically designed to help women-owned businesses succeed by providing them with low-interest rates, credit lines, or creating partnerships. 

Top Resources for Finding Financing - Loans and Grants 

To help you get started, here are some top resources for finding financing: 

1 - SBA - for women-owned businesses

The Small Business Administration (SBA) offers several loan programs specifically designed to meet the needs of women-owned businesses. Whether you are a new business or an established company, the SBA has a loan that can help you secure financing for your business’s growth. 

2 - State & Local Grants for Women

State and local governments often have grants for women-owned businesses. You can find these by doing an online search, but it’s also good to ask your local Chamber of Commerce or municipal office what they know about available grants. The federal government also has programs that award funding to specific groups based on certain criteria. 

3 - Business Loans

Business loans are a great way to get funding for your business. These can be obtained through banks and other lenders, depending on the size of your business and how long you need the loan. They're available for short-term or long-term needs and are open to all types of companies, regardless of their size. 

4 - Office of Women’s Business Ownership 

The Office of Women’s Business Ownership (OWBO) is a small business development center that helps women-owned small businesses access the capital, contracts, and markets they need to grow. OWBO provides free, confidential, and confidential business counseling, training, and mentoring. 

5 - 8(a) Business Development Program 

If you're seeking financing for your business and you're a woman, there's one more place to look. The 8(a) Business Development program provides assistance to small disadvantaged businesses. Unfortunately, this does include women as well, but why look a gift horse in the mouth? If it means you get your funding, then go get your funding! 

6 - Women-Owned Small Businesses (WOSB) Federal Contracting program

The WOSB Federal Contracting program helps women-owned small businesses get federal contracts. It is for businesses owned by one woman or a group of women qualified to be considered under the program’s rules. The WOSB Federal Contracting Program was created by Congress to encourage more contracting opportunities with small businesses owned and controlled by women. 

7 - Angel Investors & Startup Incubators

Angel investors are high-net-worth individuals who invest their own money into a startup in exchange for a percentage of ownership. Angel investors can be found through networking, referrals from friends and family, or through incubators.  

Incubators are organizations that provide services to startups, including mentoring programs, legal guidance, accounting support, and more. Incubators have relationships with angel investors and often introduce entrepreneurs to their network for funding opportunities. 

Never Be Afraid to Ask for Help 

Be confident in your business. Believe in your idea or product, and be willing to put in the time and effort it takes to make your vision a reality.

As a woman, you are most likely going to face an uphill battle, but that shouldn’t discourage you from trying. There are many strong, successful women out there doing amazing work in business. 

That is part of the reason Meyers Financial Services was created. Our team of financial advisors and business experts understand the unique needs of female-run enterprises. We can offer guidance, support, and financial services to ensure your business venture has the best chance at success. Schedule a call with our team today, and let’s find a pathway forward for your women-owned business. 

Book a Call today and let’s discuss your options.

Lillian Meyers CFP®, CDFA®, EA is a Financial Planner for Women in Sonoma, California helping clients live their best life through the use of financial planning, investment management, and other sophisticated financial options.