Access to adequate financing has been a perennial challenge for women in business. Thankfully, the advent of digital lenders opens up options for women who want to grow their businesses. In this article, we’ll delve into traditional and emerging financing alternatives. Using these lending avenues, you can access some business loans for women. Lastly, we’ll skim through special grants for women in business.
Read on to learn more about accessible financing options for women in business.
Traditional Funding Options That You Can Access
1. Angel investors
Angel investors are wealthy individuals or networks willing to finance businesses with an expectation of making a return on their investment. They get to own a portion of the company for their investment in the industry. Nonetheless, the business owner maintains complete control of the business.
Check out angel investors in your area who are open to financing women’s business ideas. To be successful in getting funding from angel investors, you need to prepare and present a brief, well-thought-out, and captivating pitch.
Examples of angel investors who support women-owned businesses:
- 500 Women
- 37 Angels
- Female Founders Fund
- Chloe Capital
2. Venture capital
Venture capital firms are investors willing to finance businesses that show long-term growth potential and a serious growth trajectory. Venture capitalists typically consolidate funds from high-net-worth investors and financial institutions.
Apart from funding businesses, venture capitalists bring into the business technical expertise. Small business owners benefit immensely from managerial expertise, best practice adoption, networking opportunities, and market access.
The main disadvantage of venture capital is that they control how you run the business since they own part of it.
Consider venture capital if your business shows huge growth potential, especially if accessing traditional credit for women becomes unnecessarily challenging.
Examples of Venture Capital firms:
- Kleiner Capital
- Women’s Venture Capital Fund
- Hypatia Capital
3. Small business loans for women
You can grow your business by accessing small business loans from numerous traditional lenders like banks and credit unions. Terms for getting these loans are increasingly becoming more friendly to women-owned enterprises.
Small business loans for this group are particularly attractive because the bank isn’t interested in owning a share of your business. Besides, the bank levies reasonable interest rates on loans, unlike venture capital firms that expect a colossal return on their investment.
There’s an array of private lenders and the SBA that offer accessible and affordable loans for women.
Here are some financiers that can help you develop your business idea as a woman entrepreneur:
- Government-backed SBA loan programs
- Elizabeth Street Capital
New Financing Options: Online Lenders
Online lenders have made access to finance faster with less stringent lending. They’re ideal when you need emergency funding as they provide faster access to business loans when compared with banks. However, the convenience of borrowing from online lenders typically comes at higher rates when viewed against credit unions and banks.
Some online lenders that offer some business loans for women:
- Credibility Capital
- Funding Circle
- Camino Financial
Special Grants For Women Business Owners
If your business can meet the eligibility of grants that government agencies and private corporates offer, then go ahead and apply. Since grants provide free money, the qualifications can be stringent, and the process is competitive and time-consuming. However, organizations that offer grants aren’t interested in owning a piece of your business.
The main undoing of grants is the limited number of these options that spark stiff competition from businesses that meet the eligibility criteria. Since grants are few, there’s no guarantee that you’ll be successful at getting one, even with a compelling business pitch.
Grants for women entrepreneurs:
- Government grant opportunities: Grants.com
- Eileen Fisher Women-Owned Business Grants
- Amber Grant
- The Girlboss Foundation Grant
There’s a wide array of options for getting financing for your business idea as a woman entrepreneur. Traditional lending options like small business loans, angel investors, and venture capital have been with us for some time. Emerging online lenders are blowing open the borrowing options for your business and present the benefit of easy and faster access to financing. Government agencies and private corporate entities also offer special grants that target women-owned businesses. Apply for the correct funding for your business today.