As we come out of the year and into the New Year it is time to start looking at funding for women in business. Why not? It has been said that the number of female entrepreneurs will increase for the third straight year. And it is a well known fact that female CEOs out-earn their male counterparts. However, that doesn’t mean that all women are given equal funding. As you read on, we are going to discuss some of the ways that women are being less well funded by capital.
By 2021, just 7 percent of women who were venture capital investors were women. This percentage has remained steady over the past couple of years. In addition, venture capital investors are statistically less likely to give capital to female entrepreneurs than male entrepreneurs. There are many reasons behind this trend. One, it is believed by many, is that there simply aren’t as many female entrepreneurs or females that are successful as a result of funding for women in business.
The lack of funding for women in business is also believed to stem from an overall lack of interest in becoming a business owner. This lack of interest is a problem within the small business community itself. Many women are raised to believe that they need to be a career woman before they become independent, which does not match up with the thoughts of many men. As a result, they choose careers that pay more but also allow them some independence.
Another reason for the funding gap between men and women in business is that there simply aren’t as many grants available. Small business owners must take advantage of local and state funding programs in order to receive funding from the government. When searching for private funding, it is important to find grants that match your qualifications closely. While grants may be available from local businesses themselves, it is rare to find a grant that specifically targets a small business. Finding local businesses that wish to provide funding may be easier than searching for government funding.
There are a number of government and privately sponsored grant programs that women can apply for. These programs range in funding amounts from federal grants, which are provided by the United States government, to state and local grants, which are typically offered by states. Each of these programs has their own funding requirements. Some require local and business paperwork, while others simply require that an application be submitted. Still others have a higher degree of screening and more restrictive funding opportunities.
A third, less well-known source of funding is made available to small businesses owned by women. MLM and network marketing companies often have an inherent interest in providing capital to small businesses owned by women. This type of funding is generally referred to as MLM or direct sales funding. Because it is based on recruiting new distributors, MLM funding can have a much higher rate of success. However, many direct sales and MLM companies will require potential partners to have at least some business experience, which can make obtaining funding from these companies a bit more difficult.
There are also a number of private organizations that provide funding for women owned small businesses. A few examples include: Women Innovate Business Centers, Inc., SM booths and Women Business Recovery, Inc. While the rates and success rates for these grants tend to be lower than the other two options, they do exist. In addition, they do typically have much stricter screening requirements.
Finding grant funding for women in business is not as difficult as it may seem. However, it does require that an applicant be very organized and pursue both traditional and nontraditional funding sources to meet her business needs. In some cases, small business loans are a good option. However, they typically come with high interest rates and very stringent loan requirements. As a result, most women who are interested in starting their own business will do well to consider the other options available.