In 2014, there were close to 9.1 million women-owned businesses in the United States, a 68 percent increase since 1997, according to The 2014 State of Women-Owned Businesses Report from American Express. This percentage increase exceeded the national average of small business growth by 1.5 times.
It also illustrated what we already know: Women entrepreneurs are having a tremendous impact on the small business landscape nationwide.
Yet to continue to be competitive and grow, these entrepreneurs have to find funding for their ventures. And, alarmingly, women entrepreneurs are increasingly being turned away by banks for small business loans.
Thankfully, they still have other options, given the rise of technology-driven financial lending sources — such as online loans, peer-to-peer loans and crowdfunding.
Then there are government grants. While not widely known or used, these grants are another great option for women seeking extra funding for their business ventures. They just take a little more work.
Business owners often turn to grants because they are not required to pay them back; essentially, you can look at grants as “free money,” but they come with stipulations.
Also, understanding and navigating the grant process can be complex.
First, you have to research and find a grant for which you’re eligible. Then, you have to understand the strict application and compliance guidelines you must meet, to be eligible. Third, you have to compete with other businesses for the same pool of money. Fourth, if you’re awarded a grant, you must report on how you used it. Finally, you must devote time and energy to the lengthy application process, then wait for approval.
In a nutshell, you need to have all of your ducks in a row, up-front and afterward.
Many business owners think that federal grants are just a click away. We have all seen the ads promoting free federal money to start businesses. But this is a huge misconception. While there are federal grants available in the areas of medical research, science, education and technology development, no such grants exist specifically for women-owned businesses. You may find grants that fund projects that empower women, but such funding is often set aside for nonprofit corporations, not for-profit businesses.
When researching grants specifically for a woman-owned business, start at the state level. Most states offer grants for women-owned businesses in some capacity. Each state website has a business section where you can find grant and funding opportunities for women and minority-owned businesses. A good example of this is the business section for the state of New York, which lists incentives and programs for businesses. Check out your state’s site to find out what is available for your business.
Related: U.S. Is No. 1 for Women Entrepreneurs, But There’s Still Room for Improvement
Another great resource to use in your research is the Minority Business Development Agency (MBDA). The MBDA is an agency of the U.S. Department of Commerce that assists minorities and women in establishing and growing their businesses. On its site, you can research grants and access links to state agencies that work with women-owned businesses for funding opportunities. Click here to view all of the state agencies across the country.
To help in your search, we gathered information on these private grants for women entrepreneurs started:
Once you find a funding opportunity, there are steps required to apply. A few tips to assist you:
If you find the grant application process too daunting or lengthy for your small business, Kabbage is committed to supporting small business loans for women business owners. Because our application process is fully automated and online, we can quickly provide small business loans of up to $100,000. We use simple, meaningful revenue data from your business to approve your business — not elaborate documentation that takes extensive time to gather. To learn more, visit entrepreneur.com.
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