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4 tips to get funding for women-owned businesses

Tips for women entrepreneurs: Don't be afraid to apply for funding, seek women-friendly loan programs.

Self-employed women are much less confident in their ability to qualify for a business loan than their male counterparts, according to Finder’s most recent Consumer Confidence Index. Close to a third (29%) of women considering getting a small business loan said they weren’t confident at all in their ability to meet eligibility requirements for those loans, while just 13% of men feel the same. And the women aren’t wrong to be skeptical.

Graphic source
Even though women-owned small businesses make up 49% of all businesses, in 2022, 25% of their loan applications were denied, compared to 19% of the applications by male-owned businesses. And with women-owned business startups nearly doubling since the start of the Covid pandemic, it’s vital for women to know how to get the funding they need to bolster their businesses.

Tip #1 Don’t be afraid to apply for the funding you need

One of the reasons women don’t get the funding they need is because they’re less likely to ask for it. Some lenders report that just 25% of women business owners apply for financing, while 33% of men do. And while you should do everything you can to be sure your business meets the eligibility requirements for a loan, you shouldn’t let your lack of confidence in your qualifications keep you from applying.

Pay special attention to loan programs that don’t require a hard credit check, where applying won’t affect your credit score.

Tip #2 Look for women-friendly loan programs

In your search for financing, you may find thousands of business loans available. But some lenders are more apt to consider funding a woman-led business than others.

  • Small banks and credit unions. Look local first. A lot of regional banks and credit unions have community initiatives designed to help small businesses in a select area. And because credit unions are mostly not-for-profit organizations, they can often offer lower interest rates than you’ll see at a major bank.
  • SBA loans. The US Small Business Administration backs a variety of loans across a network of lenders, with no-collateral and quick decision options that can give you the working capital you need.
  • Online lenders. With less stringent requirements and a variety of no- or low-doc loans available, loan programs offered by online lenders might be a good fit for your business. These loans also tend to turn around faster, offering you funding within 24-48 hours from when your application is approved. And they’re often more willing to work with what other lenders might consider high-risk industries.
  • Venture capital. Women tend to invest in women, and venture capitalists are ready to invest in women-led businesses. For example, the Fearless Fund offers investment capital to businesses led by women of color, and SoGal Ventures is looking to fund women-led startups.

Tip #3 Grant programs are worth the work

What could be better than funding that you don’t have to pay back? Grant applications are known to be long and high maintenance, but grant programs are also highly specialized. Many grants are targeted toward helping women entrepreneurs keep their businesses running and expanding. A quick search on select sites, such as GrantsForWomen.org, can help you find hundreds of options, including the following:

  • The Amber Grant Foundation doles out a $30,000 grant to women entrepreneurs every month and two end-of-year grants worth $25,000 each.
  • Cartier Women’s Initiative offers grants from $30,000 to $100,000 to women-owned businesses that “aim to have a strong and sustainable social or environmental impact” on the community. The program also offered grants for women-led science and tech companies.
  • Just this year, the Fearless Fund established its Fearless Strivers Grant Contest, offering $20,000 plus digital tools and mentoring to black women running small businesses.
  • To hedge your bets, you may consider using the iFundWomen Universal Grant Application, which can help you find all the available grants matching your business information.

Tip #4 Use your local resources

Most states have some kind of small business resource center that can help you find the funding you need. For example, California’s Office of Small Business Advocate and the Texas SBA. The US Chamber of Commerce also has over 100 local offices nationwide to help you find the local business resources you need.

Regardless of where your business is located or the type of business you run, there is funding to help. Taking advantage of those resources and opportunities may be the only way to ensure the growth and success of your business into the future.

About the Author

Heather Petty is a personal finance writer at Finder, specializing in home and personal loans. After falling victim to a disreputable mortgage broker when buying her first home, she’s on a mission to help readers avoid similar experiences when managing their own finances. A self-proclaimed word nerd, her writing and analysis has been featured on MSN, Credit.com and MediaFeed, among other top media. Heather previously worked as a technical writer and editor for the casino systems industry and is an internationally published young adult mystery author. She earned a BA in English with a minor in journalism from the University of Nevada, Reno.

This article originally appeared on Finder.com and was syndicated by MediaFeed.org.

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