Women-owned businesses are flourishing in the US, creating millions of new jobs and generating $ 1.9 trillion in revenue in 2019. Although these businesses are critical to the country's economy, most of them are classified as small businesses, for they have less than 500 workers. Small business owners face many challenges in accessing the funding needed to grow their businesses, and this sad reality is worse for many women entrepreneurs.
Women-owned businesses receive a smaller percentage of small business loans. Although this lending gap has narrowed in recent years, the loan size available to women-owned firms is 31% lower than that of their male counterparts. Access to capital is key to any business venture's success, and women-owned businesses need more funding if they are going to grow to their full potential.
Below are some of the ways women-owned businesses can access more capital and become sustainable and more profitable:
A grant is a form of free financing for businesses given to deserving entrepreneurs. There are numerous private grants that are geared to promoting small businesses, especially those owned by women. Although the competition for these grants is very high, they can be a great source of the much-needed capital for female entrepreneurs looking to expand their businesses.
Through the Small Business Administration (SBA), the government also award grants to many entrepreneurs in the country. Women-owned businesses can benefit from the various SBA grants that focus on women.
With the advent of the internet, women-owned businesses can easily access loans by exploiting emerging entrepreneurial finance trends. Business loans can be acquired from banks, online lenders, or peer-to-peer lending organizations.
Also known as angel investing groups, these organizations provide capital for a business in return for the corresponding ownership shares. In recent years, there have emerged various venture capital firms that are female-focused and work in helping women business owners grow their businesses.
Crowdsourcing websites use social media to reach many people who invest in various businesses. Crowdfunding involves lesser risks as compared to bank loans and venture capital firms. They are, therefore, great financing sources for many entrepreneurs, mostly small business owners.
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