The number of women-owned businesses in the United States has seen huge growth, increasing a dramatic 31 times in the past 46 years, according to the 2018 State of Women-Owned Businesses Report. Between 1972 and 2018, they’ve risen from 402,000 (4.6% of all firms) in 1972 to 12.3 million (40% of all firms) and counting.

And what’s more? Women also account for a whopping 40% of all self-employed Americans.

But despite these numbers and what looks like success on paper, female entrepreneurs actively fail to claim a large portion of the total employment and revenue share. This signals an alarming problem: That many lack the resources, educational opportunities and funding to really thrive in their business endeavors.

Fortunately, a number of programs and organizations are working to change that, offering training, networking, mentorship, certifications and increased access to capital. Are you a budding female entrepreneur? Below are some of the resources that can help you succeed.

Find specialized funding to overcome the gender lending gap

Securing funding is often a struggle for women entrepreneurs and business owners who want to grow their business.

Biz2Credit research has found that the average-sized loan for women-owned businesses was 31% less than for male-owned businesses in 2018.  This is despite having relatively same-aged businesses (The average business age was between 3.5 and 4.5 years for both cohorts).

For female entrepreneurs facing funding difficulties, the below grants and financing options may be able to help.

Federal business grants for women

Finding the best funding option for your business can help you gain the resources needed to finance your business goals. Grants are funds that don’t have to be repaid, and they’re often issued by a government entity, corporation, nonprofit organization, foundation or trust.

The federal government does not offer grants for starting or growing a business. However, if you’ve started a non-commercial organization (such as a non-profit) in medicine, technology development or related fields, you could get some funding through specific channels.

Some business grants are available through state or local programs. But these grants usually require you to match the funds or combine the grant with other forms of financing, such as a loan.

Grants.gov: Various government agencies offer grants on the federal level. Register to apply through Grants.gov and understand your legal eligibility for each funding opportunity.

Small Business Investment Company (SBIC) Program: The Small Business Administration (SBA) partners with private investment funds licensed as small business investment companies to provide growth capital to small businesses.  

Small Business Innovation Research (SBIR) Program: This program encourages small businesses to conduct research and development (R/R&D) projects in exchange for grants or various work contracts.

Women’s Business Centers: Women’s business centers can help women entrepreneurs with business development and access to capital. Some lend money directly and others help you find grants.

Private/state and local grants for women

There are also state and local-level grants you could leverage. To see whats available, check out your individual state’s small business office. Economic Development Resources and Small Business Development Centers can also provide a wealth of information.

Angel investor websites are another approach you can take to secure a private investment. A new industry association of angel groups has also emerged, called the Angel Capital Association (ACA). The ACA keeps tabs on angel groups and estimates that there are 14,000 plus angel investors nationwide.

Crowdfunding

According to the National Women’s Business Council, women have been 32% more successful at raising capital through crowdfunding than men. They also get higher average pledge amounts than men (despite significantly more men using this financing method int he first place). 

A few platforms for crowdfunding include:

• Crowdfunder
• EquityNet
• Fundable
• Funerdea
• FundingHero
• WeFunder
• SeedInvest
• MicroVentures

Business loans

Unlike a grant, a business loan is debt that your company must pay back according to the specific loan’s terms and conditions. They can come from banks, microlenders and online lenders as well. Lenders require cash flow to support a loan, and if you’re only a year or more into your business, it can be difficult to get a loan when you’re first starting your company.

Consider looking into small business loans, term loans and business lines of credit. Compare everything, including interest rate and loan terms. Of the loans you qualify for, choose the one with the lowest APR, because you’ll pay less over the term of the loan.

Here are a few different types of entities that offer business loans:

• Banks: Banks are intermediaries between depositors (who lend money to the bank) and borrowers (to whom the bank lends money). You might get the best terms by going to a bank you already use.
• Microlenders: Microlenders offer small, low-interest loans to low-income individuals and groups.
• Online lenders: This is an alternative to a traditional bank. Online lenders allow you to apply for a loan on a website instead of visiting a bank, get a fast approval decision, usually within minutes and deposit the money directly into your bank account.
• Government business loans: Government business loans are offered through banks and direct lenders that partner with the Small Business Administration. These are long-term, low-interest loans that business owners can use to start a business.

Most loans require a high credit score, and if you have a low credit score, a bad credit personal loan is another option for funding business needs.

Having a high credit score is imperative

Biz2Credit found that the average credit scores for women-owned businesses dropped from 598 in 2017 to 588 in 2018 and trailed the scores of their male counterparts (613) by 25 points

Fortunately, credit scores aren’t set in stone, and there are many ways to improve yours if it’s not in good standing.

How to build good credit from the ground up

Maria Otero launched the Women’s Venture Fund in 1996 with the idea that women could succeed as entrepreneurs when they can access credit and resources. “All the research tells you that women have challenges with credit, and for every five women who apply, only one will get funded. Access to credit and equity is a challenge.”

You can increase your credit score through several methods:

• Make on-time payments on everything, even items like utility bills.
• Keep your credit utilization rate — which is the ratio of your outstanding credit balances compared to your overall credit limit on all accounts — to 30% or less.
• Limit your number of credit inquiries.
• Ask for a credit line increase (but don’t use it).
• Become an authorized user on a high-credit consumer’s credit card.
• Minimize  your debts.
• Keep balances low on all revolving credit — a type of credit that does not have a fixed number of payments and is the opposite of installment credit.

How your personal credit score could affect your business

There are three major types of business loans that can be an option: bank loans backed by the Small Business Administration, microloans from nonprofit lenders and loans from online lenders. It’s also possible to get a business loan with bad credit.

There are a few simple steps you can take:

1. Find the right loan.
2. Shop around for lenders. Compare interest rates and terms for all lenders you research. Lots of options, from banks to microlenders (for businesses that are really small) and online lenders could be an option for you.
3. Gather up your documents, such as business and personal tax returns, business and personal bank statements, business financial statements and legal documents. Your lender will tell you which documents you need.

Apply for mentorship and business development programs

Mentorship and business development programs are other resources that can help women-owned businesses thrive and grow. These often help female entrepreneurs with networking, skills development and more.

How to find development programs

There are several programs and organizations that offer entrepreneurial mentorship programs to help build networking skills, business development and women-owned certifications.

A few notable mentorship programs for women entrepreneurs can have a Women Business Enterprise Certification with the Women’s Business Enterprise National Council (WBENC), a private third-party that certifies women-owned businesses on behalf of U.S. corporations. Also, look for WBE certification through city, county or state programs. A few options include:

• The Small Business Administration (SBA) offers access to mentorship for women business owners through Women’s Business Centers, SCORE and Small Business Development Centers.
• Look for mentorship programs on a local level. An example is Valley Venture Mentors, which was founded by Feldman. It builds, supports and maintains a community to launch entrepreneurs and nurture startups.
• If you’re a minority, look for Minority Business Enterprise certification (MBE) with the National Minority Supplier Development Council (NMSCD) or a local MBE program. The requirements are that the mentorship program should be 51% owned, operated, capitalized and controlled by a member(s) of a minority group who is the top executive officer. MBDA Business Centers work to promote the growth of minority-owned businesses and can also help you find a mentor.

According to Experian’s Small Business News’ Statistics and Obstacles Facing Women Entrepreneurs study, small business owners who have access to mentoring report higher revenues and growth rates.

Hone your industry-specific skills

Women business owners in specific industries face unique financial and startup challenges. Half of all women-owned businesses are concentrated in three industries, which have all seen a decrease in revenues. These three industries include:

• Health care and social assistance
• Professional/scientific/technical services
• “Other services,” such as hair/nail salons, pet care, etc.

Women in other industries such as construction and STEM often face increased scrutiny and access to funding due to inexperience, knowledge and overall acceptance in these industries

How to seek further education, experience and involvement

Women-owned businesses that have the highest total revenue are in industries in wholesale trade, retail trade, and scientific and technical services. Women historically haven’t broken into these industries and must seek additional experience, credentials and education to increase credibility and industry acceptance.

Further education and certifications in these industries can increase trust and credibility in the eyes of investors, through online classes, certifications, STEM mentorship in high school/college and building relationships in these industries.

Co-founder and CDO Taylor Bruno of SoLo Funds, says, “As a female co-founder in the predominantly male-led tech industry, I’ve worked for the last 10 years in close proximity to the challenges facing female entrepreneurs.” She says her approach has everything to do with relationships. “I form relationships with the people I work closely with on a professional level while opportunistically finding time to get to know them on a personal level over coffee.”

Get involved

Experts agree that the more people who can attend networking events, conferences, and conventions in these industries, the gender gap will eventually close. Get involved in discussions, presentations, seek peer mentors in hard-to-break industries.

Rick Feldman, lecturer in entrepreneurship, organizations and society at Mount Holyoke College, a women’s liberal arts college, says, “We need to start putting money where it’ll make a deep-rooted, long-lasting significant change. The money has to go to not just causes, but activities that will generate even more resources, and that means putting the money in resources and women who are doing real things, starting businesses, taking on leadership roles. That’s where we need to see more resources.”

The bottom line

Female entrepreneurs face various challenges in growing their businesses, but these hurdles aren’t insurmountable by any means. With the right skills, mentors and resources, women can see their business venture grow and thrive just as any other modern professional.