Starting a small business is incredibly tough going. As a startup facilitator that aims to empower small businesses, we understand just how tough it can be. For this reason, you need to make the best use of every advantage that you can, and start off with the best loan possible.
The good news is that, as a female entrepreneur, you actually have a lot of options available. There is considerable social capital behind disadvantaged groups, and many financial avenues are there which were not accessible before. There are several loan programs and grants in place specifically for women in the entrepreneurial sector, though you need to be selective in your approach.
For women seeking to make a positive social impact or who are involved in the technology sphere, there are increased funding opportunities. In fact, you have a distinct advantage if you are a female in these areas – there are many multiple funding options catering to these categories. Social companies using smart technology to solve problems is a highly valued group.
Let’s get started!
5 Best Online Business Loan Lenders for Women
Lending Club: Best for businesses looking for a flexible P2P term loan
Lending Club has a partnership with the US Women’s Chamber of Commerce (USWCC) in an attempt to make credit more accessible to women, so this could be a viable option. Lending Club is an online marketplace for business loans, connecting lenders and applicants. It is not a direct lending institution. Loans extend all the way up to $300,000. Lending Club is a massive platform that has facilitated over $28 Billion in loans. It provides term loans for a wide variety of business purposes, such as equipment, working capital, debt consolidation, or credit card refinancing.
Kabbage: Best for modern businesses who want a line of credit fast
Kabbage provides business lines of credit. These lines can be drawn upon as needed, which offers maximum flexibility to business owners. You only pay interest on what you draw. Lines up to $250,000 are available and you can qualify in under 10 minutes. The qualifying criteria are 12 months in business and annual revenue of $50,000. A business credit card comes with the business line of credit for extra convenience.
Ondeck: Best for larger and established businesses
Ondeck has delivered over $10 billion to companies across the globe and is a well-known provider of small business loans. Ondeck offers term loans up to $500,000 and lines of credit up to $100,000. Rates with Ondeck are superior to many other online providers. However, the minimum qualifying criteria are a little harder to satisfy. Applicants require 12 months in business, $100,000 in annual revenue, and a credit score above 600.
Fundbox is perfect for small businesses that need access to capital quickly and without any hassle. The platform offers a business line up to $100,000. The application process is lightning fast and funds will be in your account as soon as the next business day. There is no minimum credit score.
SBA (7)(a) for Women
The SBA (7)(a) loan is good for women who have very strong credit and a profitable business model. The loans are backed up to 85% by the US Federal government, which encourages lending institutions to make loans to small business enterprises.
But getting an SBA (7)(a) loan application approved is tough work. The amount of documentation required is enormous and you will be waiting for months to gather all of it and await feedback. On top of this, you will need a good credit score (about 680+), two years in business, and $100,000 in annual revenue. While these are not official stipulations and anybody is welcome to apply, these are the realistic minimums. SBA(7)(a) loans range from $30,000 to $5 Million.
On the other hand, the rates offered are the best around. If you are already in a good position, then this is an excellent route. Bear in mind that you will need to be very organized, patient, and diligent when applying for this type of loan. For this reason, an online loan provider might be a better option. It is also worth noting that the SBA has opened an Office of Women Business ownership to help women gain access to capital through special programs. Loans of up to $50,000 are available through this service.
Microloans for Women
Grameen America is one of the largest microloan operators catering to women entrepreneurs. They have generated over $1.1 Billion to this group, and this figure is growing. Grameen America specializes in microfinance, with loans between $2,000 to $15,000. However, this could be the edge that makes an unprofitable business profitable. It is also aimed at women living in poverty who are looking to build a better future for themselves and their families. According to their manifesto, Grameen America is the fastest-growing non-profit microfinance organization in the USA. The loans have a 99% repayment rate.
Women’s Economic Ventures (“WEV”) is one of the oldest and most successful loan institutions aiming to empower women-owned businesses. They have generated over $4 Million in loans and have been in operation for over 27 years. They run a self-employment training program. Women’s Economic Ventures also offers business recovery grants and disaster resources.
Kiva was started in 2005 as a San Francisco based non-profit organization seeking to help people gain finance through microlending. It offers zero-interest loans up to $10,000. The loan is repaid through Kiva. The aim of this organization is to reduce poverty through selective funding. Kiva is technically a crowdfunding microloan platform and is not a financial lending institution. The money is raised through $25 increments from various lenders. The repayment rate is 97%, so individuals have an incentive to contribute to a cause while also getting their money back.
Accion provides larger microloans up to $50,000 and also offers other services to smaller and medium-sized businesses. The private organization has loans designed specifically for women entrepreneurs as well as programs for other marginalized groups. Accion is a little more difficult to satisfy in comparison to Kiva and Grameen America when acquiring a loan. You need to provide proof of sufficient cash flow in order to repay the loan and meet other eligibility criteria.
Elizabeth Street Capital seeks to provide loans to women in impoverished communities. The organization is a partnership between the Bank of America and the Tory Burch Foundation, working with community development groups to allocate capital. Elizabeth Street Capital also provides networking, mentoring opportunities, and workshops for aspiring female entrepreneurs.
Crowdfunding for Women
iFundWomen is a popular crowdfunding platform that caters to female entrepreneurs. Nasdaq named this platform as among the 10 best sources of small business loans for women entrepreneurs. The site also provides a comprehensive set of tools for female business people to launch a successful crowdfunding campaign. It is the only crowdfunding platforms designed specifically for women entrepreneurs that are just getting started on their new venture.
WomenYouShouldFund is a crowdfunding platform that has been in operation for over 5 years. They are also a vibrant community that is vocal about female empowerment. This is a huge advantage, as this crowdfunding platform has a huge media presence to get projects noticed.
Kickstarter is the world’s largest crowdfunding platform for creative projects. The main categories include film, arts, design, game, music, tech, food, publishing, and illustration. This is one of the biggest and most well-known crowdfunding platforms. However, if your goal is not reached, you do not get the keep the funds. This is a huge disadvantage with this kind of crowdfunding platform, and many companies have raised huge amounts that did not meet the stated financial goal.
IndieGoGo is much like Kickstarter, though it is not as large. However, it does feature a number of advantages, the most important being that you get to keep the funds if the target is not reached. Additionally, you can invest in projects in the marketplace. IndieGoGo is a little more focused on technology-driven products as compared to Kickstarter.
GoFundMe is for unique stories and emergency situations where the money is needed urgently. It has been used by individuals in all manner of crises. If you really have a problem and a story on your hands, then GoFundMe is the perfect solution. GoFundMe is free and direct crowdfunding that is more personal in nature compared to typical entrepreneurial ventures. If your business is for a good cause, GoFundMe is an excellent platform.
Angel investment/Venture Capital for Women
BBG Ventures (“BBG” stands for “build by girls”) is the place to go for tech startups with a female founder. It was created specifically for the purposes of providing funding for this category. BBG has funded startups such as Glam Squad, Gotenna, Rocks Box, Zola, Carbon 38, Toy Mail, and many others. BBG Ventures believes that there is great growth potential in women using technology to solve everyday problems, once they are provided the capital. This is primarily because women are the dominant consumer influencers, influencing or making up to 85% of purchases.
Belle Capital USA are believers in female-owned and female-managed companies as a driver for growth. Belle Capital USA LP is an investment fund interested in technology-driven companies with at least one female founder (this is one of their investment guidelines). Further, the company must be willing to recruit top-level female talent to its board of directors. There are also a number of other considerations when allocating capital, such as the barriers to entry, exit plan, capital efficiency, growth potential, and urgency of market need.
Pipeline Angels is an organization that seeks to provide capital to women and non-binary entrepreneurs. They also provide an investment boot camp to educate angel investors about the process. To qualify for funding with Pipeline Angels, applicants have to be involved in a for-profit venture that aims to have a positive social or environmental impact. Pipeline Angels was founded in 2011 and has since distributed over $5 Million to 50+ different startups that meet their application criteria. Those seeking funding have to pitch it in front of the investors and be prepared to answers questions about their business model. The pitch summits are held in places such as Portland, San Diego, Dallas, LA, and NYC. There is also a non-US pitch held in Puerto Rico.
Womens Venture Capital Fund originated at a Harvard Business Table after two female classmates discovered that only 5% of venture capital went to teams with women in charge. At a later reunion, 30 members set out to create the Women’s Venture Capital Fund. After extensive research, it was demonstrated that there was more than enough talent in the female entrepreneurial field to justify a fund dedicated solely to this sector. They focus on women-led startups. Entrepreneurs will need to email their business plan to be considered.
Golden Seeds is one of the biggest financial providers to women in business, investing over $100 Million in this group. However, these funds have only gone to 150 companies, so they are selective in their distribution. To qualify, the woman must wield a lot of influence in the company and also have an equity stake. The provider places an emphasis on technology, consumer, services, healthcare, and business to business startups. Further criteria are that the market is at least $500 Million, the business model is scalable, and that the startup has an exit strategy within 5-8 years.
Female Founders Fund provides early-stage fund investing in eCommerce, web-enabled products and services, marketplaces, and platforms led by women. It is mainly for technology-orientated companies. According to the Female Founders Fund (‘FFF’), women perform 63% better than their male counterparts. They look for exceptional talent and believe women should get a higher percentage of venture capital than they are at present. They mainly allocate capital to female entrepreneurs in 4 categories – B2B, Healthcare, Fintech, and Consumer Marketing.
Merian Ventures focuses on women-led innovation in cybersecurity, artificial intelligence, distributed ledger technology (‘DLT’), machine learning, and consumer marketing technologies. They work with female entrepreneurs in the UK and the USA and believe that women are under-represented in the venture capital sector. The team is led by 5 female entrepreneurs with one male. They use a technology-driven approach to find and fund women who are likely to become a success.
Astia is a well-known network of over 5,000 investors funding high-growth startups at any stage beyond concept. The popular network is designed specifically to level the playing field for female entrepreneurs. This network is very well-organized with over 18 executives on the team. Due to the extensive network of partners, they possess a high level of expertise, especially in private equity.
Grants for Women (Short List)
The Cartier Women’s Initiative Award is offered to 21 women around the world each year. This is a huge award and the top 7 finalists get $100,000 in prize money, while the 14 finalists get $30,000. Additionally, all of the 21 finalists will be awarded a scholarship for the INSEAD Social Entrepreneurship Executive Education Programme along with a years support and tutoring following the program to help further the business plan.
The Amber Grant was launched in 1998 after a young woman (named Amber) died before she could make her financial dreams a reality. This grant offers $2,000 to one woman every month, and one of the monthly winners will be awarded an extra $25,000 at the end of the year. You can apply at the end of the month with an application fee of $15.
The Eileen Fisher grant is one of the most popular grant programs for women business owners. Launched in 2004, it now awards $100,000 a year to 10 women-owned businesses (at a rate of $10,000 per business). The businesses in question must have an ethos of making a positive social and/or environmental impact in the world. You must be in business for at least 3 years to qualify for this grant.
The #GirlBoss Foundation Grant is offered twice a year to women business people. The grant sum is $15,000 and the recipient also gains exposure on the GirlBoss media channels offered by the foundation. This grant is designed specifically to offer grants to women in the fields of art, music, and fashion. At the head of this foundation is media boss Sophia Amoruso. Assessment for this grant is based more on style and creativity as opposed to financial acumen and diligent planning, though these still need to be satisfied.
Grants.gov is a database of federally sponsored grants available. This could actually be the first place you go before looking at other grant options. You might find some grants that are not as widely known or have been recently introduced. You can check your eligibility, apply online, and track your progress. If you want to succeed, you need to do things differently than all the rest.
Other Great Resources
NAWBO (the National Association of Women Business Owners) is the single voice of over 10 Million women entrepreneurs in the USA. There are facilitates across the USA and NAWBO advocates on all manner of female business rights. It is the most powerful group for speaking out on behalf of women entrepreneurs and was founded back in 1975.
The Tory Burch Foundation is one of the most well known non-profit organizations seeking to further the cause of women business owners. They produce capital, networking, and provide mentoring opportunities. The foundation is partnered with Goldman Sachs for education and with Bank of America for capital access. There are a number of initiatives in place.
Women’s Startup Labs is a tech-based startup accelerator based in Silicon Valley. For women-owned business in the tech sector, they can give your company the resources needed to succeed very rapidly. They offer a 12-month intensive “HITO” program to give women the tools to propel their startup, and expect extraordinary results from their graduates.
Hera Labs is a startup accelerator for women, much like Women’s Startup Labs. However, there is less of a focus on technology-driven companies and more of an all-around approach to creating a business enterprise. Over 132 startups have gone through the program with over $1.2 Million raised from angel investors.
MergeLane aims to find exceptional women and to mentor them and finance them to success. Since its founding in 2015, it has already invested in 42 companies. It places an emphasis on conscientious leadership above all else and socially driven enterprises that aim to make a big impact. It does more than just invest – MergeLane ensures that all of its companies succeed and are given all of the necessary resources to do so.
Office of Women’s Business Ownership (OWBO) – This is an arm of the Small Business Association (‘SBA’). Its mission mandate is to “enable and empower women entrepreneurs through advocacy, outreach, education, and support. Through the management and technical assistance provided by the WBCs, entrepreneurs, especially women who are economically or socially disadvantaged, are offered comprehensive training and counseling on a vast array of topics in many languages to help them start and grow their own businesses.”
National Women’s Business Council (NWBC) – This organization does not specifically offer funding or coaching to women in business. It conducts research into current trends for female entrepreneurs and also hosts events and meetings about similar topics. This is a reputable organization that was created to recommend policy updates to Federal institutions such as the SBA, Congress, and the President. It is one of the most prominent resources if you are looking for the latest trends and patterns for female entrepreneurs in the USA.
DreamBuilder offers free online training for female entrepreneurs. The free courses are aimed to empower women and are offered in both English and Spanish. Thus far, over 60,000 students have enrolled in over 94 countries. Dreambuilder offers two programs. The first is a step by step program for starting a business. The second is a step by step program for acquiring finance. The first program offers a personalized business plan and takes about 30 hours to complete. The second program only takes 3 hours to complete.
Trends for 2020 and Beyond: Women in Business
What we are witnessing right now is a huge disruption in consumer trends, across all industries. This has a lot to do with a rapidly evolving technology, which is changing the way that consumers make purchases and how they interact with products.
Sustainability trends are huge, and it’s best to go Green as much as possible. There are increasing numbers of consumers who are going vegetarian and vegan and are demanding a more holistic business model. Socially orientated companies can capture the attention of large swathes of millennials, in particular. Socially responsible companies are held in more esteem and people, in general, prefer business models that are ethical and friendly to the wider environment. This huge trend is going to increase with continued climate changes and weather crises.
There is always a way to go green. If you manufacture clothes, make sure the material is recyclable and ethically source, and that it is made honestly odds will still be stacked largely against you (not with child labor in poor working conditions). If you are involved in food, ensure the ingredients are organic and ethically sourced. For finance, maintain minority friendly policies and mandate socially responsible investing.
Obviously, the trend of women-owned businesses is set to continue, as more women step up to management and take a front-facing role. Women entrepreneurs can capitalize on a number of current trends right now to move their enterprises forward. These trends mainly include:
- Alternative funding sources for women-owned businesses.
- Green and sustainable business models.
- Socially responsible companies.
- Diverse management models.
- Humanitarian business goals (healthcare, poverty, education, etc)
Essential Statistics: Women and Small Businesses
While it’s no great secret that women are under-represented in the world of business, economics, and finance (and many other key areas), knowing some of the statistics can often help to understand the issues in more detail.
While statistics sometimes do not tell the entire truth and can be misleading, it is useful to look over them for insights. It’s also critically important not to simply take them at face value and give up.
Regardless of your race, gender, religion, or social status, there is always a path forward. There can be a tendency to believe that the statistics are some sort of absolute law, when you have creative power and focus to do anything you want if you have the determination. Keep the statistics in mind, but don’t let them dictate your progress to you. You can easily be an outlier.
How to Be Successful in Business as a Female Entrepreneur (6 Tips)
Many, but not all strategies on how to be successful as a female entrepreneur actually apply across the board. It does not matter whether you are a male or a female – you need to focus your energy, dedicate yourself to the task, have a clear vision, and work intelligently.
Though the odds are stacked against you, the same principles will hold true. Even if you are an apparently ‘privileged’ group, such as white males, the odds will still be stacked largely against you. Nobody is going to hand you anything. The odds of success are very small for all groups, and perseverance is needed to make it long-term in the world of business.
Saying this, the following are some tips to keep ahead of the curve.
#1 – Be More Aggressive
This one applies specifically to women entrepreneurs. It has been backed up by numerous studies that women are more passive and agreeable than men. The end result of this is that women are more reluctant to ask for a raise and don’t make the best negotiators in sales agreements. Look at these tendencies and be honest with yourself. By simply asking and being more assertive, you will gain more. There is nothing wrong with being clear about what you want and going for it. It is respected in the world of business.
#2 – Don’t Buy Into Disempowerment
It’s trending right now to believe that women are disempowered and that they have it ‘so much harder’ than males. While it’s useful to be aware of this, if you buy into the victim mentality 100%, it will merely serve to crush your psychology. It will also put you into an ‘us vs them’ mentality. Remember, that life is tough – for everybody. Nothing is ever handed out easily in business. And succeeding despite the difficulties will make victory all the sweeter when it comes to pass.
#3 – Keep the End in Mind
What happens every single entrepreneur is that they start with a great business idea and have a strong passion for the enterprise with a clear vision in mind. But as they embark on their journey, it is inevitable that they run into difficulties – payroll, accounting, tax, hiring, HR, branding, marketing, sales, insurance, the list goes on and on. Keep your vision in mind, and focus on profit, enjoyment, and a positive outcome. It’s too easy to fall prey to the millions of details, so have a strong focus on where you intend to take the business.
#4 – Be Adaptable
Nothing in business ever stays the same. You are going to run up against adverse circumstances. With this in mind, you need to be very flexible in your approach. For startups, in particular, it has been shown that the ability to dynamically change a business model resulted in far greater success. This is especially true in the technology sector, though it may not hold as strongly for traditional businesses (especially brick and mortar businesses).
#5 – Focus on Focus
“Focus means saying no to the hundred other good ideas. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying ‘no’ to 1,000 things. You have to pick carefully” (Steve Jobs).
The term ‘focus’ has become a buzz word. You need to hone in on exactly what you need to focus on every day. This also means that you say no to the thousands of other potential ideas. There is too much data out there. You could spend an entire morning reading blogs and articles about business management without taking any action.
You have a certain amount of energy. If you spend all of it on too many different things, however good they might sound, your energy will be split in too many different directions. Overworking on the wrong things is a problem that all entrepreneurs make at some stage. Get wise to it early and be very careful with your time and attention – they are the only real resources that you have.
#6 – Take Your Self Development Seriously
As a female entrepreneur, the business is going to run on your energy, passion, and motivation. Don’t make the mistake of putting 100% into your business all the time. The end result will be entrepreneurial burnout, a common phenomenon that is not advertised as much as it should be. Do not trade money for time, at least not in a linear fashion. Only work very hard if you are going to get a huge payoff in the near future.
Make sure that you have a spiritual or at least a therapeutic practice to blow off some steam. Mindfulness, meditation, yoga, exercise, massage, are all great ways to take your mind of the business for a while so you can return to it fully refreshed. At the very least, take one day a week completely off the business so you can really rest and refresh. It will increase your productivity and also bring you more joy and satisfaction than working all the time.
FAQs: Financing & Loans for Women
👩 Is It Harder For Women To Get A Loan Compared To Other Social Groups?
In comparison to males, it is definitely more difficult for women to attain business loans. However, this is not quite the case for online loans, where the success rates tend to even out.
🏃♀️ What Is The Quickest Way To Get A Loan As A Woman?
The quickest way to get a loan is to use an online lender. The application process often takes less than 10 minutes to complete and the funds can be generated within 24 hours. The best online lenders include Kabbage, OnDeck, Lending Club, Smartbiz, and PayPal LoanBuilder.
💳 Is It Difficult For A Woman To Get A Loan With Poor Credit?
Not really. You can simply use an online lender, as mentioned above. Of course, the lower the credit rating, the higher the interest rate. So you can get your loan, but you have to be careful when tending to the financials.
📘 What Additional Resources Are Available To Female Entrepreneurs?
There are many resources that women can utilize. They are recognized as socially under-represented group and facilities have been made available to them. Dreambuilder is a fantastic resource to learn, and there are lots of VC funding opportunities that cater only to female entrepreneurs.
Bottom Line: Good News for Women in Business
There are good reasons for venture capital funds and grant programs to focus on female-owned venture-backed businesses.
Many venture capital groups are capitalizing on these findings and look for diversity in management. Grant programs are also in place to facilitate women in business and there are multiple crowdfunding and microfinancing opportunities.
Options are available to female entrepreneurs, and their chances of business success are higher than they have ever been. However, female entrepreneurs will still need to work and raise capital. There is no replacement for a good business plan, organization, persistence, and dedication.