Funding opportunities for women-owned businesses
Monday, 8 February 2021
Women are starting businesses at a stunning pace, and these companies are playing a key role in fueling our economy.
According to the 2019 State of Women-Owned Businesses Report, nearly 13 million businesses — about 42 percent of all businesses in the US — are owned by women. These companies employ roughly 9.4 million workers and generate nearly $2 trillion in revenue.
In addition, women-owned businesses are growing at an impressive 5 percent, more than twice the rate of other businesses. What's more, businesses owned by women of color account for more than 90 percent of the new businesses opened each year.
Despite the explosive growth and success of women-owned business, female entrepreneurs are still less likely to have access to capital. According to statistics, they are 63 percent less likely to get venture capital than their male counterparts and half as likely to get a Small Business Administration (SBA) loan because men are more likely to have higher credit scores.
The good news is there are sources of capital—both loans and grants—available for women entrepreneurs. While this list is far from exhaustive, here are some of the most well-known and widely tapped funding opportunities for women who are starting or growing businesses.
1. Small Business Administration (SBA)
While the U.S. Small Business Administration doesn't issue loans or grants directly, it does have robust programs designed to connect women-owned businesses with resources and ﬁnancing. Financing options include money for startups as well as grants and loans for existing businesses. The SBA online Lender Match is a free tool that connects small businesses with approved ﬁnancing sources.
2. Small business bank loans
Most banks oﬀer small business loans, and many are eager to loan to qualifying women and minority business owners. Banks often have tighter lending standards than other funding sources, but they can also have greater ﬂexibility to tailor a lending package to meet a borrower's speciﬁc needs. Having an existing relationship with a bank could be a plus when applying for a small business loan or line of credit.
These loans are typically $50,000 or under and can be a good option for a small startup, sole proprietor or even a freelancer who doesn't have employees. There can be limitations on how microloan funds are spent, so checking the ﬁne print is important. The SBA oﬀers a microloan program, as do several non-proﬁt organizations, including Accion and Opportunity Fund.
This website serves as database of grants, scholarships and funding exclusively for women. Similarly, Grants.gov compiles information on government grants of all kinds, including grants for women-owned businesses. Both sites are searchable by topic or keyword, and oﬀer grant education centers, grant writing tips and more.
5. 37 Angels
37 Angels is an investment ﬁrm “committed to closing the gender gap in startup investing." In addition to investing in “high-potential" startup companies, the group oﬀers ﬂedgling business owners education and advice about securing capital and building a business.
6. Amber Grant
These grants for women-owned businesses range from $10,000 to $25,000, and are designed for small, local businesses, both startups and expanding companies.
7. Cartier Women's Initiative Award
Awarding more than $1 million in grants annually, the Cartier Women's Initiative Award is intended for women-owned businesses between one and three years old that are generating revenues, but not necessarily turning a proﬁt. In addition to grant money, winners are invited to attend an intensive, six-day executive training program featuring workshops, business coaching and networking opportunities.
8. Open Meadows Foundation
This organization issues small grants—$2,000—to “women-backed projects that promote gender, racial, and economic justice." Applicants must be female and the businesses must beneﬁt women and girls. Only companies with less than $75,000 in budget resources and limited access to ﬁnancing can apply, making this an excellent opportunity for a small, female-owned business just getting started.
While the gender gap in business ﬁnancing is still very much an obstacle for women entrepreneurs, there are resources available. Hopefully, as women- owned business continue to play a powerful role in our economy, the gap will close and women will have equal access to funding for their great ideas and growing companies.
The content provided is for informational purposes only. Neither BBVA USA, nor any of its affiliates, is providing legal, tax, or investment advice. You should consult your legal, tax, or financial consultant about your personal situation. Opinions expressed are those of the author(s) and do not necessarily represent the opinions of BBVA USA or any of its affiliates.
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