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The 7 Best Small Business Financing Options for Women

Author

Meredith Wood

More by Meredith
Author

Meredith Wood

More by Meredith

For a demographic that comprises half of the population, it can be surprisingly challenging for women to get their small businesses funded. Today, 30 percent of small businesses in the U.S. are female-owned, but as a group, women receive less than 5 percent of total small business loan dollars. "Disproportionate" only begins to describe the state of business funding for women.

Experts predict that by 2018, female-owned businesses will create over half of the new small business jobs and one-third of the nation's total new jobs. Needless to say, the country needs women-owned businesses just as much as those women need capital.

Luckily, women have more options than ever to get the funding they need. As organizations, companies, nonprofits and government entities catch on to the benefit of diversity in lending practices, opportunities of all kinds are helping kick-start female small business owners' ventures.

Here's a rundown of some of the best female-focused options women have when seeking to finance small businesses.

Loans

Let's start off with small business loans for women. Though it may sound like an injustice of decades and centuries past, it's true that banks regularly deny women traditional loans for a number of reasons. Their businesses are underfunded as a result, but the following loan programs could make a big difference.

The Tory Burch Foundation

Powered by Bank of America and named for the famous designer and entrepreneur, the Tory Burch Foundation's Capital Program "provides women entrepreneurs in the United States the opportunity to access affordable loans through Community Lenders." Community Lenders are local lenders that provide capital to underserved communities — in this case, women. If approved, female applicants are partnered with lenders through the program.

Women's Venture Fund

The Women's Venture Fund prides itself on its flexible approach to lending. The program first assesses female entrepreneurs' credit needs and helps calculate loan needs, then provides funding "based on sales, number of clients, contracts and the availability of other accessible resources to support the amount requested." Through loans and comprehensive consultation, the Women's Venture Fund helps clients in the New York City metropolitan area achieve success and profitability.

Key4Women

KeyBank's Key4Women program has been dedicated to business funding for women for over half a century. Its female-friendly philosophy is an extension of CEO Beth Mooney, who was the first female chief executive of a top-20 bank. The program acts as a community whose participants enjoy access to business capital, financial services and networking opportunities.

SBA Loans for Women

The Small Business Association has its own branch of lending just for women. According to its website, "SBA provides resources to help women entrepreneurs launch new businesses, grow their businesses and compete in the global marketplace." This includes loans for specific purposes and a robust network of educational centers ready to assist women with business queries.

Grants

In contrast to loans, which must be paid back (with interest, usually), grant funding is permanent and based on a business owner's needs. That said, they can be competitive to secure. Here are several female-focused grants perfect for women looking to scale their small businesses.

Eileen Fisher Grant

Women's fashion brand Eileen Fisher gives out an annual grant to women-owned businesses "ready to expand their business and their potential for positive social and environmental impact." Unfortunately for newer entrepreneurs, only companies past the startup phase are eligible. Regardless, it's a great opportunity for small businesses that have already achieved some momentum and need a bigger boost to influence change in the world.

Amber Grant

After awarding monthly "qualifying grants" of $500, WomensNet awards one of the twelve a $1,000 Amber Grant at the end of the year. While not a significant lump sum for businesses that have already hit their stride, this grant is beneficial for young women launching businesses for the first time and looking to get their ideas off the ground. The Amber Grant is named for a young girl named Amber who died at 19 before achieving her entrepreneurial dreams.

InnovateHER

Also under the purview of the SBA, the InnovateHER Innovation for Women Business Challenge is a grant that female entrepreneurs across the country compete for. Finalists pitch their businesses in Washington, D.C., and the winner receives a $70,000 grant for their business. This is not only a boon to female business owners, but all women, as the pitches are geared specifically toward improving the lives of women.

Per the SBA, "InnovateHER provides an opportunity for entrepreneurs throughout the U.S. to showcase products and services that have a measurable impact on the lives of women and families (30 percent), have the potential for commercialization (40 percent) and fill a need in the marketplace (30 percent)."

Now, Go Get Funded

The first step to getting funded is to put yourself and your business out there and apply for the financing you need. It's better to try and fail than not to try at all. Plus, if you do find you aren't eligible for loans and grants right now, you'll have a better understanding of what steps you need to take to get financing next time.

Financing from these sources is subject to availability. Check source websites for current information.