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Great news: women around the globe are increasingly starting businesses.
When women start businesses they gain economic and social power. These women benefit, and so do their families. Women-run businesses also enhance local communities, which in turn are good for global peace. (Wow!)
More women can find business financing than ever before, too. Many funding options are from traditional sources. Others are brand new. With so many options, let’s look at three loan-based funding sources that welcome all entrepreneurs.
Before we get about business grants that are available to female entrepreneurs, we would love for you to join our growing Facebook group right here! You can also join our Pinterest group by scrolling to the bottom of this page! If you are looking for guest blogging opportunities or if you need a personal affordable coach to take you from A-Z, we can help you. Get all the juicy details right here! Have you seen our brand new shop!
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Community Development Groups
In the United States, for example, thousands of community development groups (CDGs) exist. These groups focus on local issues, including economic development. Most redistribute federal funding as small business loans. Many CDGs also rely on private funds solicited from the community.
There are some limitations if you borrow funds from a CDG. Loans tend to be small (less than $50,000). Others will only fund brick-and-mortar businesses. Some CDGs require spending loan funds in the community, too. So, for example, if you borrow funds to build out a physical space, you must hire a local company to do the work.
The advantages of a business loan through a CDG are competitive loan rates and flexibility if you have difficulty repaying a loan. Another advantage is keeping dollars flowing into your community. In contrast to a bank, all the interest you pay goes back to the CDG to fund new businesses in your area, not a new yacht for the bank’s CEO!
American should start their search for local CDGs here. Then, contact the groups in your area for specific opportunities and requirements. The U.S. Economic Development Administration lists more state and local-level groups. For example, the NREDA serves entrepreneurs in rural areas.
Here are some more small business funding options for women.
Corporate Foundations Offer Business Grants
As you start your funding search remember that you may be eligible for business grants. Some grants support women in specific industries and geographic locations. Charitable foundations are the primary source of funds.
Nearly every big business brand you can think has a charitable foundation. The foundations exist as a tax write-off for big business. In fact, they are required to give away money!
Search for your favorite brand plus “Foundation”. Many give away grants. Applying for grants takes time and effort. Most are highly competitive and have multiple rounds of evaluation. However, if you find a program that is well-suited to you and your business, go for it!
Some big-name companies that have charitable foundations that distribute grants include: Best Buy, Coca-Cola, Clorox, Ford, McDonald’s, Taco Bell, Target, Walmart, and more. Do your research. Go to the Grantsmanship Center for advice on formatting your application.
Privately Funded Business Grants
Some business grants are available thanks to private donations.
The Amber Grant is one specifically for women. Judges award one $1,000 grant every month. Grantees are selected based on their application and online votes. Once a year the foundation gives one additional $10,000 Amber Grant to one of the monthly grantees.
Clothing brand Eileen Fisher gives business grants up to $100,000 for women entrepreneurs. The businesses must demonstrate environmental or social leadership. The program remains open in 2018 but may close in 2019.
Government Business Grants
What about government-sponsored business grants? These are rare. The Small Business Administration, for example, offers business grants for research and export, but not funding to start or expand a business. SBIR.gov offers competitive grant funding for technology-related businesses. Other business grants focus on specific, underserved minority groups, such as grants provided by MBDA.gov.
Research options at grants.gov. Most government funds for business are distributed as loans through community development groups (as explained earlier). One example is business grants distributed through AAUW.org.
One specific business growth grant is a $4,000 grant provided by lobbyist NASE (National Association for the Self Employed). To apply you must be a NASE member in good standing. Annual membership fees are $120.
A twist on Kickstarter and IndieGoGo are crowdsourcing platforms just for entrepreneurs.
One example is Fundable. Entrepreneurs post videos and detailed information about their businesses. Here’s a recent Fundable pitch for an electric vehicle.
Another version is the Women’s Business Chamber of Commerce offering loans in partnership with crowdsource company LendingClub.
Crowdsourcing platforms work best if you want to bring a new product to market. They are not suitable if you are fundraising to meet operational expenses or debt service. For these, you could try peer lending or other debt and equity crowdsourcing platforms. Others offer crowdsourced lines of credit, like Kabbage.
Unfortunately, there are companies that offer “business loans for women” that are less than honest. Some charge extraordinary interest rates. Others are flat-out scams.
Grants, in particular, can be misleading; some exist to harvest and resell your data. Make sure that any lender or grantmaking organization is legitimate by researching it before submitting your personal information. Do a search on the funder first.
Here are warning signs:
- “You’re invited” seminars — these are often for products or services
- Celebrity-spokesperson infomercials or commercials touting funding
- Any business building “opportunity” that requires a credit card number or other personal information first
- Anything marketed as an effortless “quick fix” or demands action “now”
Trust your gut and ask questions. If you encounter a fraudulent lender, contact one or more of the following:
- FTC.gov – Federal Trade Commission
- Fraud.org – A division of the non-profit National Consumers League (they offer tips to avoid fraud)
- NASAA.org – North American Securities Administrators Association
Work Your Network
Your best bet is to actively grow and nurture your professional network. Get to know people in person. Establish trust and be generous with your time.
Female-lead business networking groups, as well as other professional organizations, can lead to financing opportunities. Business groups exist for women of all backgrounds and demographics. In-person events are the best but online networks are helpful, too. All are an excellent source of advice, introductions, and learning, and should not be overlooked.
Search for groups on Meetup.com and through your local business community groups.
Thanks to governmental investment, private investment, and new technology platforms, there are more options than ever to fund your business. Suggest additional resources in the comments below.
About Katie McCaskey
Katie McCaskey started a restaurant and specialty food retailer that operated for a decade. She is now Content Director of OpenWater, a grant management software platform. Visit the site to download free resources to establish and grow a grant program.
Twitter: @getopenwater Facebook: getopenwater LinkedIn: openwaterinc
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