• Pailor Team

5 Ways Women-Owned Businesses Can Access More Capital

Women-owned businesses are flourishing in the US, creating millions of new jobs and generating $ 1.9 trillion in revenue in 2019. Although these businesses are critical to the country's economy, most of them are classified as small businesses, for they have less than 500 workers. Small business owners face many challenges in accessing the funding needed to grow their businesses, and this sad reality is worse for many women entrepreneurs.

Women-owned businesses receive a smaller percentage of small business loans. Although this lending gap has narrowed in recent years, the loan size available to women-owned firms is 31% lower than that of their male counterparts. Access to capital is key to any business venture's success, and women-owned businesses need more funding if they are going to grow to their full potential.


Below are some of the ways women-owned businesses can access more capital and become sustainable and more profitable:


Private Small Business Grants for Women


A grant is a form of free financing for businesses given to deserving entrepreneurs. There are numerous private grants that are geared to promoting small businesses, especially those owned by women. Although the competition for these grants is very high, they can be a great source of the much-needed capital for female entrepreneurs looking to expand their businesses.

  • Every month, the Amber Grant Foundation gives out $10,000 to a female business owner. One of the twelve women-owned business recipients is also awarded an extra $25,000 in the annual Amber Grant.

  • Female entrepreneurs can also win either the $100,000 or $30,000 awarded by the Cartier Women's Initiative Award to 18 deserving female-led businesses every year.

  • Another good grant for women-owned businesses geared towards environmental and social change is the Eileen Fisher Women-Owned Business Grant Program.

Federally-Sponsored Grants


Through the Small Business Administration (SBA), the government also award grants to many entrepreneurs in the country. Women-owned businesses can benefit from the various SBA grants that focus on women.

  • One such grant is through the InnovateHER Challenge, where the SBA gives out a total of $70,000 to three women-owned businesses.

  • Through Grants.gov, female entrepreneurs can access federally sponsored grants for small businesses. 

 Small Business Loans


With the advent of the internet, women-owned businesses can easily access loans by exploiting emerging entrepreneurial finance trends. Business loans can be acquired from banks, online lenders, or peer-to-peer lending organizations.

  • Bank loans. They are not only the traditional forms of financing for many businesses but also one the cheapest. However, they may take longer to process, and statistics show that about half of women business owners who apply do not get these loans. Nevertheless, women-owned businesses can benefit from the banks' SBA loans and enjoy the low-interest rates.

  • Online lenders. Many businesses are turning to online lenders for fast processed small loans. Many women-owned businesses can benefit from these easily accessible loans as most of the traditional qualifiers such as collateral and credit score are not essential prerequisites to securing a loan. Bank transactions and personal data are used to ensure fast vetting and allocation of the loans.

  • Peer-to-peer lending organizations. Another way women-owned businesses can access capital is through peer-to-peer lending groups, which can easily access loans from banks and then give out these loans to individual business owners at an interest.

Venture Capital Firms


Also known as angel investing groups, these organizations provide capital for a business in return for the corresponding ownership shares. In recent years, there have emerged various venture capital firms that are female-focused and work in helping women business owners grow their businesses.  


Crowdfunding 

Crowdsourcing websites use social media to reach many people who invest in various businesses. Crowdfunding involves lesser risks as compared to bank loans and venture capital firms. They are, therefore, great financing sources for many entrepreneurs, mostly small business owners.


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