Your Community Holds the Answer
Women entrepreneurs are getting after it. We’re starting more businesses than ever before. In fact, according to Lendio, between 2019 and 2023, new women-owned businesses were double new male-owned businesses. And yet, we’re still not taken as seriously when we walk into a bank to ask for funding capital.
While women own 42% of businesses in the U.S., they receive less than 2% of venture capital funding and experience higher rejection rates for business loans. Ugh. It’s not just annoying. These disparities limit growth opportunities and perpetuate financial inequities. But why does this happen, and more importantly, how can women entrepreneurs break through these barriers?
Why Women Receive Less Business Funding
Our challenges as women entrepreneurs in securing funding start in our history. The biases that we’ve fought in the past and the barriers we’ve overcome can still be found in traditional funding. Here’s why the funding gap persists:
1. Bias in Traditional Lending and Venture Capital
Studies show that women-led businesses are less likely to receive funding from banks and investors. Implicit biases and outdated perceptions about risk and leadership often lead to fewer funding opportunities. Women entrepreneurs frequently face skepticism about our ability to scale a business, despite our strong financial performance.
2. Higher Rejection Rates for Business Loans
When applying for business loans, women are approved at lower rates and often receive smaller loan amounts than males. According to the Federal Reserve, women business owners are more likely to be denied financing or offered less favorable loan terms, making it harder to access the capital needed for expansion.
3. Lack of Women in Investment and Decision-Making Roles
Unfortunately, only a small percentage of venture capital firms and banks have women in leadership roles. So there’s a disconnect in funding decisions. Without diversity in leadership positions, women entrepreneurs may struggle to find advocates who understand their challenges and opportunities.
Alternative Funding Solutions for Women Entrepreneurs
Traditional funding routes may be stacked against women, but new opportunities are emerging that give female founders access to capital.
1. Investment Crowdfunding and Community-Driven Investment
Investment crowdfunding has become a powerful tool for women entrepreneurs to bypass traditional gatekeepers and get funding directly from their communities. Platforms like Honeycomb Credit allow small business owners to raise capital from their loyal customers, friends, and local investors who believe in their vision.
2. Grants and Microloans for Women-Owned Businesses
Unlike loans, grants provide non-repayable funding to women entrepreneurs. Many organizations, like The Tory Burch Foundation and the Amber Grant, offer financial support to female-led businesses. Plus, microloan programs from institutions like the SBA’s Women’s Business Centers provide accessible, low-interest funding options.
3. Building on Business Networks and Partnerships
Strong business networks can open doors to funding and resources. Women-focused organizations like NAWBO (National Association of Women Business Owners) and local chambers of commerce offer mentorship, pitch competitions, and funding connections. Building strategic partnerships with other businesses can also lead to financial support and investment opportunities.
How Honeycomb Credit is Helping Close the Gap for Women Entrepreneurs
At Honeycomb Credit, we believe that access to capital should be based on potential and community. That’s why we provide women entrepreneurs with a platform to raise funding through their communities, offering an alternative to traditional loans.
One Women Entrepreneur Who Thrives with Crowdfunding
Many women-led businesses have successfully raised capital through Honeycomb Credit, using community investment to fuel their growth. For example, Hillary’s Chicago Pizza, a woman-owned Chicago-style pizza business, has run three successful offers to expand operations and increase production capacity. By tapping into her local supporters, she secured the funding needed without relying on banks or venture capitalists.
Financial Independence for Women Entrepreneurs
By turning to community-backed investment funding, women entrepreneurs can keep more control over their businesses. Our independence is important for keeping us moving forward, sustainable, and prime us for long-term success.
Final Thoughts
The funding gap for women entrepreneurs is real, but it is not insurmountable. By leaning on alternative financing options like investment crowdfunding, women can take control of their financial futures and scale their businesses on their own terms.
If you’re a woman entrepreneur looking for funding, now is the time to explore community investment through Honeycomb Credit. Join a network of empowered business owners who are transforming the way women access capital.
Explore funding opportunities on Honeycomb Credit
Apply for grants designed for women entrepreneurs
Financial independence starts with taking the first step. Let’s bridge the funding gap together.
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