Small Business Funding for Women

Business Funding for Women: What Kind of Funding is Available for Women Entrepreneurs?

Women today own more than 12 million businesses in the United States and are responsible for employing a workforce of over 10.7 million nationwide. These small businesses play a big role in the diversity and success of our country, so it’s easy to see why supporting women-owned businesses is so important.

To find the funding necessary to start or grow their small business, many women turn to grants and small business loans. Here’s a look at some of the programs and options that women entrepreneurs should consider getting business funding and the best way to get a business loan for women if you decide to go that route.

How Women Business Owners Can Fund Their Business

There are many different financing options available to women small business owners, whether looking to start a new business, purchase an existing business from someone else, or even expand a business they already own. The right funding options will give you access to the working capital you need to purchase real estate, renovate a building, buy equipment, hire employees, purchase inventory, market your business, or even cover your cash flow needs while you wait for the business to take off.

These funding options most often include:

• Short-term loans/microloans
• Small business loans
• Small business lines of credit
• Crowdfunding
• Grants and scholarships

The right one for you depends on your business, what you need to buy, and your eligibility factors (such as your business’s history, annual revenue, and your personal and/or business credit scores).

Short-term loans

If you only need to borrow money for a short period of time, to get your business up and running or cover expenses when you hit a rough patch, a short-term business loan for women might be the answer. Short-term business loans are available through most lenders and typically have a repayment period. These loans may best suit small businesses with a limited credit history.

Microloans

Microloans are smaller-than-average loans, often utilized by new businesses, startups, low-income borrowers, or those without a strong enough business or personal credit history to borrow more. These loans may be small but can be used to meet a small business need or even help establish your company’s credit history.

While microloans are available from many banks, credit unions, and online lenders, there is also an SBA microloan program from the U.S. Small Business Administration (SBA). This program offers up to $50,000 to eligible small businesses and select not-for-profit childcare centers through special intermediary lenders.

Small business loans

Many types of businesses rely on loans to fund big upfront or ongoing expenses. Small business loans for women-owned businesses are offered through traditional banks, credit unions, and online business lenders with a range of loan amounts, terms, and loan options.

Business loan programs are often unsecured, meaning that they are credit-based and don’t hold any assets as collateral. However, some secured business loans for women-owned businesses are available, such as equipment financing for heavy machinery purchases or real estate loans to buy commercial space.

One common type of loan for small businesses is an SBA loan, which provides up to $5 million in unsecured business financing through options like the SBA 7(a). The application process for SBA loans can be a bit daunting, especially for new entrepreneurs, as a comprehensive business plan is usually required, and the application can take many weeks to approve.

Early-stage businesses or those with a bad credit history may find it challenging to get approved for unsecured bank loans. Some financial institutions may let newer entrepreneurs personally guarantee their business loan with their own credit, but you may receive lower loan limits, shorter repayment terms, and/or higher interest rates if you don’t qualify typically.

Small business lines of credit

One alternative to business loans for women is a line of credit. This funding option is available through most member FDIC banks and lenders and allows you to pull from an open credit line the way you would a business credit card: on-demand and as needed.

Once approved, your business line of credit will remain open until you need to borrow against it. You won’t pay any interest charges unless you use the line of credit, and as you pay off any borrowed balance, your available credit will refresh so you can borrow again for future needs.

Crowdfunding

Another funding option for your small business is crowdfunding or relying on the contributions of others in your network to fund certain business projects and expenses. While this type of funding is less popular than traditional business loans for women, it has become more and more commonplace with the adoption of social networking.

Crowdfunding can be especially helpful for businesses with a popular idea or cause. Have a great invention that you need help manufacturing? Want to start a nonprofit organization for a special cause? Reaching out to your social network and letting the idea spread can be a great way to raise capital that you either don’t have to repay or can exchange for a reward once your business is up and running.

While not incredibly commonplace, women do tend to use crowdfunding as a financial resource more often than their business-owning male counterparts. We’ve even seen platforms (like iFundWomen.com) popping up exclusively to cater to these minority-owned businesses in recent years, helping level the playing field and giving women access to the funds they need for business development and growth.

Grants and scholarships

An ideal type of business funding is the kind you don’t have to repay, and grants and scholarships fit the bill. Both grants and scholarships offer monetary gifts to selected individuals or businesses that meet certain criteria. This award is not a business loan; for women who receive these funds, knowing that it’s money they don’t have to repay can be transformational.

There are many different types of grants and scholarships for women-owned businesses in particular. Whether you’re looking to grow your business enterprise, better serve your community, or tackle a passion project, you can probably find a woman-aimed award that could meet your needs.

That said, grants and scholarships are a lot more limited in nature than other types of business loans for women.

• Grants and scholarships may have much lower award limits than you need to fully fund your business.
• Entry pools can be very competitive and/or have strict eligibility criteria.
• The selection process may take weeks or even months to complete.
• Some scholarships and grants only offer a handful of awards per year; if rolling entries aren’t accepted, you may find yourself waiting a long time to apply.

6 Small Business Grants for Women

While business loans for women-owned companies are usually the best option for new or growing businesses, it’s never a bad idea to apply for grants. The process is similar to what you’re already doing on your loan application, but if you are awarded a grant or scholarship, it’s free money you won’t have to repay.

Here are some small business grant programs to consider alongside your business loans for women.

1. Amber Grant

Award: $30,000 in monthly grants plus three year-end $25,000 grants

Eligibility requirements

• Pay a $15 application fee
• Submit an easy online application explaining your business and what you would do with the grant money

2. EmpowHer Grant

Award: Up to $25,000

Eligibility requirements

• Be a female entrepreneur at least 22 years-old
• Business must be registered and operating solely in the U.S. for no more than three years

3. Cartier Women’s Initiative

Award: Up to $100,000 per awardee

Eligibility requirements

• Business must be for-profit, operating for between one and six years
• Must be revenue-generating for at least a year (though you don’t have to be profitable yet)
• Majority-owned by founders and team members
• Women must be the majority shareholders of founder equity

4. High Five Grant for Moms

Award: Up to $10,000

Eligibility requirements

• Be a mom entrepreneur
• Own at least 50% of a for-profit business and/or product
• Have verifiable revenue between $10,000 and $500,000 in the least 12 months
• Be headquartered in the U.S. or Canada

5. Idea Cafe Grant

Award: $1,000

Eligibility requirements

• Sign up as an Idea Cafe Regular
• Have an exciting business idea

6. Women Founders Network Fast Pitch Competition Grant

Award: Up to $25,000 per awardee

Eligibility requirements

• Business must be majority woman-owned or the founder/cofounder/CEO must be a woman
• Must attend an in-person Fast Pitch event at UCLA
• Based in the U.S.
• Outside financing already received cannot exceed $75,000

In addition to funding, some of these grant programs also offer financial guidance, coaching, and mentorship as part of an award package. You may be able to find other grant opportunities, depending on your eligibility and even the business you own (or want to start); in addition to your local and state women’s business centers, some places to look include

• gov — This federal government database lists many sponsored grants, including those for small businesses. To apply, you’ll need a DUNS identification number and will need to register to do business with the U.S. government through its System Award Management website.
• org — Here you’ll see lists of past and upcoming grant opportunities for women-owned businesses with various requirements and award options.
• The National Women’s Business Council
• The Office of Women’s Business Ownership

Final Thoughts

About 40% of all businesses today are owned by women, a number that has been steadily climbing in recent years. As any entrepreneur knows, though, finding the right funding to start a small business can be complex, especially with a limited business history or lack of revenue. Thankfully, there are many grants, programs, and small business loans for women available today, helping provide them with the capital they need to start a new business, expand an existing business, or even purchase a business from someone else.

FAQs on Business Loans for Women

Can I get a business loan with no business income?

Business loans for women are available to entrepreneurs of all sizes, even without income. However, without a strong credit score, securing large unsecured loans is difficult. You may need a personal guarantee, collateral, or a high-interest short-term loan. Woman-owned business loans offer tailored funding for female entrepreneurs.

Does my personal credit affect a business loan?

Your personal credit score may impact a business loan decision, especially if your business’s credit history isn’t enough to qualify for the loan on its own. You may be asked to offer a personal guarantee for the debt, and approval would then hinge on your credit score, credit history, and other personal factors.

How much can I take out for my business?

Small business lenders have their own loan limits and criteria for borrowing, and the amount you can borrow may also depend on whether you’re opting for a secured or unsecured loan. Some traditional lenders may offer business loans up to $500,000, while programs like SBA loans may provide up to $5 million."

Can I get free money for my woman-owned business?

Many grants and scholarships are available to minority-owned businesses, providing funding. However, some grants may have application fees or requirements that doesn’t need to be repaid the way a loan would. If awarded, these funds can be used in place of, or even alongside, business loans for women to help start, grow, or purchase a business.

FAQs

Can women get money to start a business?

The U.S. Small Business Administration (SBA) offers loan programs designed to help business owners who have historically had limited access to capital. According to the SBA, the number of loans approved and guaranteed for female entrepreneurs has risen by 70% since 2020.

What is the Google grant for women's small business?

Google supports women-led startups through its Google for Startups Women Founders Fund, offering non-dilutive cash awards, mentorship, Google Cloud credits, and product support to help these businesses grow and succeed.

Is the government giving out money to start a business?

The government offers a variety of programs and resources, such as loans and contracts, to support small businesses. Additionally, state programs like California's Fund provide valuable opportunities to help entrepreneurs get started.

How to get a startup business loan with no money?

Securing a startup business loan with no money can be tough, but there are still options to explore. Business credit cards, microloans, equipment financing, merchant cash advances, crowdfunding, and grants can provide the financial support you need to get your business off the ground.

How to get money to start a business?

If you want funding to start a business there are several options to explore. Consider personal investment, loans, grants, crowdfunding, or seeking support from angel investors or venture capital. Each path can offer unique advantages depending on your business needs.

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