Closing the gap: How to overcome obstacles as a female entrepreneur

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The number of women-owned businesses in the United States has seen huge growth, increasing from 402,000 in 1972 to nearly 13 million in 2019, according to American Express’s 2019 State of Women-Owned Businesses Report.

And what’s more? Women also accounted for 39.3 percent of all self-employed Americans in 2018, according to the U.S. Bureau of Labor Statistics. That’s a 12.5 percentage point increase over 1976.

But despite these numbers and what looks like success on paper, female entrepreneurs 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 42 percent less than for male-owned businesses in 2019.  This is despite having relatively same-aged businesses (the average business age was between 4 and 4.75 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 noncommercial organization (such as a nonprofit) 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.

  • Various government agencies offer grants on the federal level. Register to apply through 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 what’s available, check out your 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. An 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 more than 14,000 angel investors nationwide.


According to the National Women’s Business Council, women have been 32 percent 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 in the first place).

A few platforms for crowdfunding include:

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 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 rates 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 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 590 in 2018 to 588 in 2019 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,” she says.

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 percent 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 to apply for a business loan

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. Here’s how you can prepare to apply for a business loan:

  • 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 the right fit for you.
  • Gather up your documents. This may include 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.

“My business completely transformed when I was willing to invest in the right support, which was three years into my business,” says Stacy Raske, an author, speaker and success coach catering to women leaders. “I encourage those starting out to plan and budget for investing in a coach or mentor right away to ensure your success.”

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 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 WBENC 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 Rick Feldman, lecturer in entrepreneurship, organizations and society at Mount Holyoke College, a women’s liberal arts college. 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 (NMSDC) or a local MBE program. The requirements are that the mentorship program be at least 51 percent owned, operated, capitalized and controlled by a member(s) of a minority group who is the top executive officer. In addition, Minority Business Development Agency (MBDA) Business Centers work to promote the growth of minority-owned businesses and can help you find a mentor.

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 all tend to have lower revenues than others, according to the report from American Express. These three industries include:

  • “Other services,” including hair/nail salons and pet care
  • Health care and social assistance, including day care and home health care
  • Professional/scientific/technical services, including law and bookkeeping

Women in other industries such as construction and STEM often face increased scrutiny and difficulty in accessing funding due to a lack of acceptance in these industries.

How to seek further education, experience and involvement

Women-owned businesses that have the highest total revenue are in wholesale trade, retail trade, and professional, 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. Resources include online classes, STEM mentorship in high school and college and networking in these industries.

Taylor Bruno, SoLo Funds co-founder and design advisor, 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.”

Know how to network

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

“We need to start putting money where it’ll make a deep-rooted, long-lasting significant change,” Feldman says. “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 ventures grow and thrive.