According to the 2022 Biz2Credit Women-Owned Business Survey1, there are 13 million women-owned businesses in the U.S., and these businesses employ 10 million people.
Like many small businesses, these women-owned companies often rely on outside funding sources to help pay for expansion, inventory, emergencies, and other expenses.
In fact, the same survey found that in 2021, 33 percent of all business loan applications came from women-owned businesses. About 40 percent of these applications were approved, and the average loan size was $49,712.
There are many financing options available to small business owners, each with its own benefits and limitations. Let’s take a look at three popular types of financing and then take a deeper dive into grants specifically for small businesses owned by women. Because who doesn’t love free money?
Three Popular Financing Options for Women-Owned Small Businesses
Financing is an essential factor in the success of a small business. You need money to get your business off the ground and keep it afloat.
Although financing comes in many forms—from microloans to crowdfunding—many small business owners look to three main sources of funding:
1. Small business loans
In 2021, the U.S. Small Business Administration (SBA) delivered almost $45 billion in loans to small businesses, $5 billion of which went to women-owned businesses.
SBA loans, bank loans, and online loans are all great options to increase cash flow or make large purchases for your business. However, loans must be paid back with interest, and they can be difficult to qualify for if your credit history isn’t the best.
2. Equity financing
Investors are often willing to provide funding for startups or established businesses with a promising financial outlook and business plan. This type of financing doesn’t need to be paid back. Instead, the business owner gives the investor a percentage of the business’s equity and some control of the company in exchange for funding.
3. Business grants
Business grants are an important financing option for women-owned businesses. Unlike business loans and equity financing, grants don’t need to be paid back and don’t require you to give up equity or control of your business.
Grant funding can come from a wide variety of sources, including local, state, or federal governments; private foundations; or corporations. Although some grants allow you to use the funds for any business-related purpose, others come with stipulations that require the funds to be used only for specific expenses.
Additionally, the grant application process can be highly competitive with very specific qualifying criteria. These factors make grants a less predictable source of financing compared with business loans or investor backing that don’t have the same limitations.
But the prospect of receiving funds that don’t need to be repaid and don’t require sharing equity makes grants an attractive financing option despite the challenges.
5 Women-Owned Small Business Grants You Need to Know About
Researching and applying for business grants take significant time and effort, so we did some of the heavy lifting for you. Here is a list of five highly regarded women-owned business grants, including an at-a-glance summary of the most important details.
1. Amber Grant
WomensNet founded the Amber Grant in 1998 to honor the memory of 19-year-old aspiring businesswoman Amber Wigdahl.
Grant amount: $10,000 awarded monthly; $25,000 awarded annually
- Open to female entrepreneurs aged 18 and up.
- Must live in the United States or Canada.
- Applicants must pay a $15 application fee.
- Both for-profit and nonprofit businesses are eligible.
2. Fearless Strivers Grant
The Fearless Strivers Grant awards 11 grants, as well as digital tools and one-on-one mentorship, to help Black women-owned companies build, sustain, and grow their businesses.
Grant amount: $10,000
- Open to Black females who are the principal owner of a U.S.-based small business.
- Business must have an annual revenue of $3,000,000 or less.
- Business must have 50 or fewer employees.
- Applicants to the regional grants must have businesses physically located in that city.
3. Dream Big Awards
The Dream Big Woman-Owned Business Achievement Award recognizes outstanding business achievements and significant contributions made by women-owned businesses.
Grant amount: $25,000
- Open to for-profit small businesses in operation for at least one year.
- Must be at least 51 percent owned or controlled by one or more women who are U.S. residents.
- At least one woman must control business management and daily operations.
4. Cartier Women’s Initiative
The Cartier Women's Initiative drives change by empowering women-run and women-owned businesses with a strong and sustainable social and/or environmental mission.
Grant amount: $30,000 and $100,000 grants available
- Recipients must be women-run, for-profit, early-stage, revenue-generating, sustainable businesses from any country.
- Science & Technology Pioneer Award applicants must also be in the field of technology or scientific innovation.
- Diversity, Equity & Inclusion Award is open to all genders.
5. SoGal Black Founder Startup Grant
The SoGal Startup Grant helps Black women entrepreneurs break down the barriers to accessing capital so they can work on the next billion-dollar idea.
Grant amount: $5,000 and $10,000 grants available
- Open to anyone who self-identifies as a Black woman or Black nonbinary entrepreneur.
- Recipients must have a legally registered business that provides a scalable, high-impact solution and plans to seek investor financing.
Additional Resources for Women-Owned Businesses
The five popular grants listed above are far from the only alternatives to loans or equity financing available for women-owned businesses. Here are a few places to look for additional grants and other financial resources:
Federal small-business grants for women
Many federal grants must be used for specific purposes and can’t be used for day-to-day expenses or overhead.
- Small Business Innovation Research and Small Business Technology Transfer programs
- Program for Investors in Microentrepreneurs (PRIME)
State and local small-business grants for women
Local grants often are less competitive than federal grants, but you will need to do some research to find opportunities in your region. Good places to start include local chapters of professional organizations.
- Women’s business centers
- Economic Development Administration
- Small business development centers
- Minority Business Development Agency centers
Fine-Tuning Your Financial Strategy
Access to financing when you need it is essential to the success of any small business. Grants for women-owned companies provide an extra layer of support for businesses that may otherwise struggle to find adequate funding.
The competition for small business grants is fierce. And with limited amounts of funds available, it’s best to make grants a small part of your business financing strategy and look at more reliable sources of funding.
First State Community Bank partners with many women-owned companies to provide them with small business banking resources and services such as loans, checking accounts, and commercial credit cards. Download How to Choose the Right Bank for Your Small Business to learn more about what to look for in a banking partner and how to make sure your bank will grow with your business.