Women-owned Businesses: Financing Options to Consider

There’s no easy way to say it—owning a business is hard work—and sometimes even more so for women business owners. Currently, more than 11.6 million companies in the United States are owned by women. In 2017, they employed almost 9 million people and earned 4.2 percent of the total U.S. revenue.

Even though women-owned businesses are on the rise, financing options can sometimes be hard to find. A lack of financing can mean a lack of working capital or having to postpone a much-needed expansion which in turn can cause a business to not reach its full potential.

Thankfully, there are several places that women business owners can turn to keep their businesses on the cutting edge of success. Since there are many options, you should always do your research before jumping to accept funding. Be sure to weigh the pros and cons. Also, know what the total cost will be for you and your business in the long run.

Business Loans

Small business loans are often the go-to option for business owners with good credit who are looking to start, expand, or infuse their business with some working capital. Most banks and other lender types offer small business loans, and the rates are often competitive, with flexible repayment terms. The federal Small Business Administration also offers programs to help women-owned businesses find financing.

Online lenders have gotten into the business loan arena as well. And there is a wealth of options online for everything from finding internet-based lenders to peer-to-peer loans. Many of them have earned solid reputations among business owners and encourage women-owned businesses to apply for a loan.

Loans, however, do come with a catch: interest.

You’ll always pay back more than you take out. And if your expansion doesn’t go as well as planned, or the advertising push you took out a loan for doesn’t pan out into more sales, you could find yourself on the hook for a loan you can’t pay back. Always think long and hard before signing the dotted line on a business loan. Especially if you’re a sole proprietor whose personal credit is also tied up in your business.

Creditworthiness can also be a sticking point for business loans. Without good credit, your chances of getting approved for a business loan are much lower. That could mean not being able to finance something your business really needs. This does not mean the end of the world, though.  There are many other funding opportunities made available for women small business owners, which we will explore further now.

Grant Funding

Depending on the type of business, grants are an option as well. Grants are money that the government or various companies and non-profits set aside to help businesses that meet specific criteria.

One non-profit, for instance, may want to only help women-owned businesses that are located in a specific area of a city, or have a certain percentage of women employees. Another may want to help women involved in a specific type of business, such as a kind of store or service. These are great opportunities to look for as they are much less competitive and you are more likely to secure one.

There are grants for many different types of businesses and ventures; one list of government grants can be found at the Grants.gov website. Grants from non-profits and other organizations can be found at Grantwatch.com.

In order to successfully get grants, you’ll need to find a grant you qualify for. Then follow the application criteria—it’s different for each grant program. That application process can be involved, time-consuming, and possibly even fruitless, if you don’t get the grant you’re seeking.

Once you’re awarded a grant, you may also need to report back to the organization or government agency about how you spent the money. Although this includes additional work on your end as the small business owner, it can also be seen from a positive point of view. With someone watching your spending, you will be sure to have spent the money responsibly, and to the benefit of your business.

Investment Funds and Investors for Women-owned Businesses

One often-overlooked source of funding is your investment portfolio—or someone else’s. Getting investors is a fantastic way to fund your business without having to worry about your credit rating or owing lenders money.

There are many ways to find investors. You could try friends and family first, then check with your local Chamber of Commerce and small business groups in your immediate neighborhood or city. Look for professional organizations in your field or niche, or other organizations that are geared toward investing in women-owned businesses.

Just like technology has changed the loans and grants landscape, finding investors is much easier with the internet. Entire web communities exist for the purpose of helping angel investors find new ventures to help fund. These are high-dollar investors that also act as mentors and industry connections.

Nothing in life is free, however, and investor money is no different. While investors are well aware that they might lose the money they’re investing, they typically want something in return for their taking an interest in your business.

That could come in the form of a spot on your board of directors, with voting power to help make decisions in the company. It may even be a high level of stock or share ownership, or something else. Before accepting help from an investor, make sure that they aren’t asking for more control in your company than you’re willing to give. If not careful, you could potentially lose the ability to make final decisions for the company that you initially created. Although it seems unfair, that is what comes along with this sort of funding.


There are a lot of ways for women to fund their business; while they all have their drawbacks, they all have specific situations in which they might be the perfect solution. If one option doesn’t look like it’ll work for your business, don’t give up! The right option is out there.

Andy Kearns
Andy works to produce personal finance content to help educate consumers across the globe. When he's not writing, you can find Andy cheering on the sub-par Lakers, or somewhere on a beach.
Andy Kearns

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