The number of women-owned businesses is skyrocketing, and that number is expected to continue to grow. According to Entrepreneur, in the period from 1997 to 2014, the number of women-owned businesses has increased by an astounding 68%. Perhaps even more significantly, that same source found that this increase eclipsed the national average of small business growth by 1.5 times!
Like any startup, women-owned businesses need capital. You can go through traditional bank loans or other types of lending, but you also have another option: grants.
Why Are Grants Important?
The reality is that even the most innovative and well-thought-out business ideas won’t come to fruition without adequate financial backing. Lack of capital can tank a start-up or prevent a sophomore business from taking off and expanding. Unfortunately, data indicates that women entrepreneurs may have difficulty qualifying for traditional small business loans. According to a recent report of the Senate Small Business & Entrepreneurship Committee, women entrepreneurs are struggling to qualify for the same lending options available to their male counterparts.
This is where grants come in. Instead of a traditional loan, which you have to pay back with interest, grants are more like gifts. If you qualify, you get the money and you don’t have to pay it back. Grant funding can be a great opportunity for women who have challenges qualifying for traditional funding and equal opportunities to complete on the entrepreneurial playing field.
How Grants Work
Grants are obviously preferable to loans, since they’re basically free money. Of course, it’s not as simple as asking and receiving. The application process can be long and intensive and often involves a significant waiting period. You’ll also have to meet specific requirements to qualify.
Grants exist in many forms, from federal grants to state grants to grants funded by private organizations, non-profits, or charitable foundations. The grantor (the entity dispersing the grant funds) will determine the qualifications and stipulations of the grantee (the person or organization receiving the money).
Many experts that advise women-owned businesses should start researching grants at the state level. The requirements for state grants may not be as stringent, and more options may exist than with federal funding. Each state will have a state website with a business section detailing available grants for women and minority businesses. Many states also have grant programs for women-owned businesses in traditionally male fields, like construction. So, start with your state’s website and check out what options are available.
Great 2017 Grants for Women-Owned Businesses
As we mentioned, there are lots of grants available at every level of government and in the private sector. In addition to checking out those options, make sure to take a look at these 5 grants. They’re some of the best available and if you qualify, they can make a huge difference in your business.
The Eileen Fisher Business Grant requires that the qualifying businesses be 100% women-owned. Their focus is on businesses that represent social consciousness and innovation. In past years, five grants have been awarded per year. Grant recipients have received up to $125,000 total.
The InnovateHER Challenge first began in 2016. It’s a competition that starts at the local level and goes through several rounds. The 10 finalists from the local competitions compete in Washington, D.C. for up to $70,000 in funds.
According to the SBA website, InnovateHER seeks to “showcase products and services that have a measurable impact on the lives of women and families (30%), have the potential for commercialization (40%), and fill a need in the marketplace (30%).” The goal is to fund innovation for great commercial ideas and reward female entrepreneurial spirit.
FedEx awards grants of amounts of up to $25,000 to several winners of their annual contest. There are gold, silver, and bronze winners – who also receive various FedEx business products to supplement their prize winnings. Entry for the grant money requires a business plan, business description, and photos and video (optional) of your intended business goals.
To read about the 2016 Fed Ex Small Business Grant winners, visit here.
The Amber Grant Foundation started in 1998 to honor a young woman who died before she could make her mark on business. Today, the Amber Grant Foundation offers a $500 grant to one women-owned business each month. At the end of the year, one of the monthly grant awardees will receive a larger grant amount to fund her business.
The board selects the winners of the grant and reward those who demonstrate both strong entrepreneurial ideas and passion for their business ideas.
To read the profiles and vote on past recipients, visit here.
5. Small Business Development Centers (SBDC)
It can be a little overwhelming to search through all the potential grants available to you, so the SBA has set up Small Business Development Centers (SBDC) all over the country to help you figure out what grants are available. While the SBDCs don’t actually offer grants, they do offer meetings with local advisors that have comprehensive knowledge of the grants in your area and nationally.
For more info and contact information of your local SDBC, visit this resource.
The Bottom Line
Loans are a classic way to fund your business, but why seek a loan when you can get a grant that you don’t have to repay? In addition, many women-owned businesses find that it’s harder for them to get traditional funding than for their male counterparts. So before you commit to a loan, consider checking out the grants available to you!
Thank you to the Coca-Cola Foundation for supporting Accion in expanding economic opportunity for women business owners.