In 2022, a study by Biz2Credit highlighted significant disparities between women-owned and men-owned businesses when it came to funding. Not only are women-owned businesses funded at a lower rate than their male counterparts, the average loan size for women-owned companies amounted to $49,712, while men-owned companies received an average of $83,198.

Unequal access to capital is a significant obstacle for female entrepreneurs, but it is just one of many unique challenges faced.

We’ll dive a little deeper into the hurdles women face as entrepreneurs and how they can overcome these obstacles to better navigate the business world.

Challenges faced by female entrepreneurs

Female entrepreneurs face unique professional challenges, many of which were harder to overcome before the Women’s Business Ownership Act was passed in 1988. This legislation eliminated many funding barriers that kept women from applying for their own business loans; it also cleared the way for the expansion of Women’s Business Centers in the U.S. (in 1989, there were only four locations in the country; now, there are well over 100).

Though the tools for funding and success have become more accessible in recent decades, many obstacles remain. According to the U.S. Chamber of Commerce, capital, confidence, and market saturation remain three of the most significant barriers to women business owners. Here’s a look at statistics that show the upward battle women face on a regular basis.

Lack of financial support


Gender inequality


Racial disparities


Funding for female entrepreneurs

For many female entrepreneurs, securing financing is the first hurdle to overcome. Here’s a look at the various funding options available to women-business owners.


Business grants for women 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. But 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. Here are a few resources:

  • Various government agencies offer grants on the federal level. Register to apply through and to learn more about your legal eligibility for each funding opportunity.
  • Small Business Investment Company (SBIC) program: The U.S. 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 federal research/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.

There are also state and local-level grants you could leverage. To see what’s available, check out your state’s small business office. The U.S. 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 private investment. An industry association of angel groups, called the Angel Capital Association (ACA), estimates that there are more than 14,000 angel investors nationwide.

Federal contracts

The government’s goal is to award 5 percent of all federal contract dollars annually to women-owned businesses. To ensure equal opportunities for women, competition for certain contracts is limited to businesses participating in the women-owned small business (WOSB) program, economically disadvantaged women-owned small businesses (EDWOSB) and the 8(a) business development programs, which are open to minority small business owners. In order to participate, businesses must meet certain criteria and maintain WOSB certification through the SBA.

Business loans

Business loans provide funding to small businesses and traditionally come from banks and credit unions. These types of loans can come with strict loan requirements, such as revenue requirements and a certain number of years in business.

Business loans must be repaid within a certain loan term along with interest. Depending on your creditworthiness,  interest rates on a business loan can soar upwards and well beyond 30 percent, especially if you’re working with a non-traditional lender. To estimate what your monthly payment may look like, use our business loan calculator.

SBA loans are backed by the SBA but not given directly to businesses. Since these loans are partially guaranteed by the SBA, they tend to have more favorable terms than other traditional loans, including low interest rates and long repayment terms.

Alternative lenders

Alternative lenders for small businesses are also worth exploring, especially if traditional banking is not in the cards for your business loan. These funding sources may include:

  • Online and direct private lenders. 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.
  • Crowdfunding. Instead of taking out a loan, crowdfunding allows small business owners to raise capital through a fundraising campaign.
  • Peer-to-peer lending. For greater accessibility, peer-to-peer (P2P) lending platforms connect entrepreneurs directly with investors. You may even be able to qualify for these loans with fair credit.
  • Microlenders. Even if you have bad credit, you may still be able to qualify for a microloan. This type of business loan usually has a maximum amount of $50,000 and may have more favorable interest rates and loan terms compared to traditional business loans for bad credit.
  • MDIs. Consider pursuing funding through a Minority Depository Institution. As banks owned and operated by minority communities, MDIs support underserved populations by improving access to credit, loans and other banking services that may not be an option at other institutions due to strict lending requirements.
  • CDFIs. Like MDIs, Community Development Financial Institutions cater to underrepresented and minority communities and the women entrepreneurs within them. This increased access to affordable lending fosters economic empowerment, reduces disparities and promotes sustainable community development.
  • Business credit cards: While not the same as a loan or grant, a business credit card can help you make small purchases as well.
Bankrate insight

Types of crowdfunding include donation-based, which requires no repayment of funds. There’s also equity crowdfunding, which gives equity ownership to investors. A few notable platforms for crowdfunding include:

How to overcome obstacles female entrepreneurs face

Overcoming obstacles is key to being a successful female entrepreneur. Here are a few tips to help you navigate challenges, foster resilience and thrive in business.

  • Build a support network: Surround yourself with like-minded individuals who can provide mentorship and connect with women’s business organizations for additional guidance and encouragement as you start and build your business.
  • Own accomplishments: It’s important to embrace your achievements as a female entrepreneur. Don’t shy away from celebrating milestones and confidently sharing your successes with the people in your life.
  • Create work/life balance: Work-life balance is essential for your well-being. Prioritize self-care, set boundaries, delegate tasks and create time for family, hobbies and relaxation.
  • Overcoming self-doubt: Self-doubt can keep you from going after your dreams, but if you challenge those negative thoughts, seek support and acknowledge past achievements, you can move past this obstacle.

Resources to help overcome obstacles

As more resources become available to female entrepreneurs, there are opportunities for women business owners to strengthen and grow their businesses.

Women-owned businesses: Get certified

Various women-owned business certifications are available for women-owned businesses, both through the government and in the private sector. To certify as a women-owned business, you’ll want to follow an established certification program to optimize your opportunities.

Certified businesses have a chance to compete for funding that is earmarked for women-owned businesses specifically (certification ensures that your business and its ownership meet certain qualifications). In addition to the WOSB and EDWOSB certifications mentioned above, entrepreneurs may also look into the Women Business Enterprise (WBE) certification.

While certification does require paperwork and associated fees, it can vet your business to obtain future funding and opportunities.

Women-owned businesses: Find business development resources

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 include 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 more options include:

  • The SBA offers access to mentorship for women business owners through women’s business centers, SCORE and small business development centers (SBDC).
  • 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.
  • Female entrepreneurs of color can take advantage of the Minority Business Enterprise (MBE) certification 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.

The bottom line

Female entrepreneurs face various challenges in growing their businesses, but these hurdles aren’t insurmountable. With the right skills, mentors and resources, women can see their business ventures grow and thrive.

Frequently asked questions about women-owned businesses

  • According to both the U.S. Chamber of Commerce and the SBA, women-owned businesses are at least 51% owned and controlled by a woman or women who are U.S. citizens.
  • To be formally recognized as a woman-owned business, you will want to obtain certification through the SBA or other formal program. This will require documentation reflecting your business’s ownership and leadership.
  • Women-owned and minority-owned businesses are two distinct groups. Like other underrepresented groups, both have historically faced challenges in accessing financing and business resources. While a women-owned business is at least 51 percent owned by a woman or women, a minority-owned business is at least 51 percent owned by a member or members of a minority group, which includes Asian-Indian, Asian-Pacific, Black, Hasidic Jews, Hispanic and Native Americans. This is according to the Minority Business Development Agency, the federal agency that promotes the growth of minority-owned businesses.