CNBC referred to our current time as “the Golden Age for women entrepreneurs.” The percentage of new female entrepreneurs in the United States is the highest it’s been since 1996, at 40%. This is great news for any women looking to be a business owner and ready to enter the market.
Unfortunately, reports show that significant obstacles still exist for female entrepreneurs. There is a “scale-up” gap between men and women – with businesses run by women starting and staying smaller than those run by men. One of the likely culprits for this gap is financing options. Some women may not even know all the options available to them! Here are some tips on how to find funding as a female business owner:
One of the beneficial things about this “golden age” is an established network of fellow entrepreneurs women can connect with when trying to find funding. For example, the U.S. Small Business Administration has specific business centers throughout the country dedicated to helping women with their small businesses.
You can also consider joining the National Association of Women Business Owners. They host peer professional development programs which can help women grow – including introducing them to useful financial tools.
If a business banker knows you and your business, it will be easier for them to understand your situation and your history when you come looking for support. That’s why you want to pick a banker you can have a strong professional relationship with. Carefully research banks and specific bankers before jumping in, and keep them updated along the way as changes occur. If you do find yourself needing to ask for additional funding, it’s going to be a much easier process than having to turn to someone who doesn’t know you.
There are a massive amount of grants which exist to help businesses on both the national and local level succeed. Of course, many of them will have specific requirements. Some of the application processes are as simple as explaining your business and paying a small fee (The Amber Grant), and others are actual competitions (InnovateHer) which have both local and national rounds. A good resource for finding the right grant for your needs is Grants.gov.
Alternative Business Funding
You might be reading this article and feel frustrated because you know you wouldn’t qualify for traditional funding like what’s described above. Whether it’s your business itself or your financial situation that is unique, alternative business funding can help. By doing so, you receive a more personalized experience that’s as individual as your situation is. You can get loan terms tailored to you, and have more freedom in the allocation of your funds.
Opening a small business is a huge leap for anyone – no matter your gender. But women have always faced a unique set of challenges in the entrepreneurial world. That’s why it’s great to see the specific organizations and companies willing to work to close the “scale-up gap”. As these funding options become more mainstream, hopefully we will see more and more women opening small businesses. It’s an exciting time to be a female entrepreneur!