Financing Options for Women in Business

Women own roughly 42% of businesses in the US while accounting for 31% of all small businesses. These women-owned businesses generate annual revenue worth $1.8 trillion despite the hardships they encounter when trying to access financing for their businesses.

Small business loans for women play a significant role in covering costs, ensuring a steady cash flow, funding for purchasing inventory, expanding the business, and meeting payroll.

Financing facilitates the establishment and maintenance of female-owned enterprises, so it’s crucial for success. Here are some financing options for women.

1. Great small business loans for women

Traditional business loans: women business owners shy away from conventional business loans from banks and lenders as approval can be tedious. These loans require the applicants to have collateral, an excellent credit history and credit rating, and a solid business plan before applying.

Small Business Administration (SBA) loans: the SBA liaises with banks to finance small businesses at competitive rates. It absorbs the risk of repayment, making it easy to access capital. You can only borrow up to $5 million, and the maximum repayment period of an SBA loan is 25 years. However, if you’re wondering if you’re making the right decision, then make sure to check A Neumann & Associates’ resources to be sure of the market trends.

Online lenders: can stand in place of traditional lenders as their qualification requirements are not as stringent. The application process is much faster, and they don’t require a storied credit history to qualify. However, they have steep interest rates.

2. Best grants for women entrepreneurs

a) The Amber Grant

Every month, the Amber Grant provides women in small businesses an opportunity to get $10,000 upon submitting a solid business plan, detailing how they intend to use the money allocated through the grant.

One of the 12 businesses awarded this grant within 12 months is eligible for a yearly $25,000 Amber Grant. This grant does not have particular initial qualification criteria.

b) Cartier Women’s Initiative Awards

This yearly grant is available to women all over the world. The Cartier Women’s Initiative Awards target businesses 1-3 years old, with great potential for growth and bias towards sustainable environment and social impact. Winner gets $100,000 and the runners-up $30,000.

c) Visa Everywhere Initiative

While this is for both men and women, there’s a specific Women’s Global Edition where two winners walk away with $100,000 after navigating through a fintech and social impact challenge. An excellent resource for fintech businesses.

d) GrantsforWomen.org

It isn’t precisely a grant, but it provides a comprehensive listing of all the available opportunities for women to access grants across all industries.

3. Other funding options you can consider

i) Pitching to investors

Female entrepreneurs with viable projections for an established business and a shortage of funds can approach investors for venture capital. The entrepreneur comes to a favorable agreement on the profit percentage to pay back to the investor. However, venture capitalists will require equity and involvement in the decision-making process.

ii) Crowdsourcing

It refers to the practice of sourcing financing from a large group of participants through a crowdsourcing platform like Kickstarter. You will pitch your business ideas, and if the group likes it, they will make small individual payments that can even balloon and surpass the requested amount.

iii) Bootstrapping

You can finance the business using your savings. It’s a great avenue for avoiding interest payments or giving bits of your business in equity deals.

iv) Family and friends

They can chip in through gifts or loans that you can repay later—one of the best ways of escaping extortionist interest rate payment and repayment terms.

Bottom Line

Through grants and business loans for women, ladies can access various financing options like grants, SBA loans, and bootstrapping to help their small businesses take off and thrive. Resources for women owners are readily available.