Women-owned businesses generate trillions of dollars and employ millions of people across the nation. But they often face unique challenges in the business financing world.
Fortunately, there are several resources available to help women entrepreneurs find the business loans they need. Those options include both private and government business loan programs.
Banks and Credit Unions
Women entrepreneurs are starting businesses at a rapid pace and contributing over $50 billion in revenue to the economy. However, multiple studies show that they face a funding gap. Only 39% of women-owned businesses have received conventional bank loans, compared to 52% of men’s.
The good news is that there are many financing options for female business owners. A few key strategies include improving your credit score and preparing a solid business plan. Also, consider exploring grants that are designed for women.
There are also lenders like microloans and community development financial institutions that focus on catering to the financing needs of underserved communities, including women-owned businesses. Some of these lending partners are also working to address gender bias in their loan assessment processes, such as CARE’s work with BBVA microfinance lender Financiera Confianza in Peru to redesign a loan product that does not require a spouse co-sign (spousal co-signation is common in many markets). In addition, being certified as a Woman Owned Small Business may help you obtain government set aside contracts.
Tory Burch Foundation
While she may be best known for her Reva flats, Kira handbags and vintage-inspired home decor, fashion designer Tory Burch is now pushing a conversation about women entrepreneurs and social change. Through her Embrace Ambition series and the foundation she created, she’s shattering stereotypes, challenging unconscious bias and proving that ambition doesn’t have a gender.
The foundation runs several programs for women business owners, including the Fellows Program which provides early-stage entrepreneurs with a $5,000 grant and a year of education. The foundation also partners with Bank of America to provide low-interest loans through community development finance institutions (CDFIs) around the country.
At a recent event, the foundation’s clothing racks were pushed to one side of its trademark orange-and-green showroom in downtown Manhattan as 75 women, all the owners of small businesses, gathered at tables surrounded by mirrored walls for a networking session modeled after speed dating. The gathering was a part of the foundation’s annual Embrace Ambition Summit, which Tory Burch says is meant to give women a platform for sharing their stories and helping each other grow.
Union Bank
Female entrepreneurs play an essential role in the economy and should have equal access to business financing options. To help level the playing field, several organizations provide loans specifically for women and other resources to encourage women-owned businesses.
The Small Business Administration offers a variety of programs and loans designed to make it easier for women to secure financing. The program’s website provides links to local offices that can provide information and assistance to women entrepreneurs.
In addition to traditional bank loans, credit unions and community development finance institutions offer business loans for women. These loans typically come with lower interest rates and more flexible terms than conventional loans. They may also offer fast approval and reduced qualifications. Additionally, the government’s Small Business Association (SBA) offers loan programs that can be used to acquire assets such as equipment and machinery. These asset-based loans tend to produce more income change than loans that are used for working capital.
Funding Circle
Funding Circle is an online marketplace that connects business owners looking for financing with people and organizations who want to invest. The company offers a variety of loan products, including term loans and business lines of credit. Its business loans are typically backed by the Small Business Administration and have repayment terms of up to 10 years. The company does not lend to businesses that engage in speculative real estate, weapons manufacturing or marijuana dispensaries.
Women-only business funding options can be an excellent alternative to traditional business loans. These programs can provide funding, mentorship and other business resources to help women grow their businesses. Some of these options include incubators and accelerators.
In addition, women who are able to secure a small business loan may also be able to benefit from government set asides. These are contracts that the federal government earmarks for women-owned small businesses. For example, the Women-Owned Small Business Federal Contracting program awards 5 percent of federal contracting dollars to women-owned companies.women in business loans