Women-owned small businesses account for nearly $2.3 trillion dollars of annual revenue and have grown at nearly double the rate of their male counterparts since 2019. Despite being a key driver of economic growth, women entrepreneurs receive much smaller loan amounts than their male entrepreneurs. This begs the question: How can female entrepreneurs equip themselves for funding success at any point in their journey?
In the United States, women-owned businesses (WOBs) represent 42% of all SMEs (small business). Female entrepreneurs are growing their sectors more than twice the rate of their counterparts and are three percent more likely to start a business than males, employing over 13 million workers last year.
Despite this wave of success, 62% of female entrepreneurs report experiencing some form of gender bias during the funding process—whether it is being denied a loan outright or paying higher rates than male borrowers.
The numbers support the claims. In recent years, the average loan size for women-owned business owners is 31% less than other borrowers. Over and over again, VC and investment firms dismiss female entrepreneurs as a “risky investment”due to the startling and historical biases plaguing women and finance.
Most research about this impact focuses explicitly on non-inclusive gender: men versus women. Transgender and non-binary people continue to be excluded from the data altogether, suggesting the U.S. financial insights portray a slim and incomplete story for women-owned businesses.
Despite these hurdles, how do women (and womxn)-business owners equip themselves for a more positive financial future?
Here are three tips:
Do your research
Because many barriers have existed and continue to exist for women securing loans, the U.S. Small Business Administration (SBA) has historically prioritized female business owners. More than half of the SBA’s microloan program—57%—went to female applicants in 2024.
Like most borrowers, female business owners don’t generally know their options for funding. Visiting specialized CDFIs and Women’s Business Centers for resources, tools, and guidance can be helpful—whether it’s assistance with a business plan or counsel on the type of funding available. The SBA has a local locator tool that helps determine the nearest Women’s Business Center or CDFI so female entrepreneurs can work with someone who understands the regional market and state laws. The National Association of Women Business Owners can offer bipartisan and additional resources for business ownership, WBENC certification, and day-t0-day operations.
In addition, female entrepreneurs may find success by certifying as a federal WOSB (Women-Owned Small Business) through the Small Business Administration as possible. The three major requirements for the program are:
- Meet small business requirements according to SBA size standards
- Be at least 51% owned and controlled by women who are U.S. citizens
- Day-to-day management of operations must be performed by women who also make the long-term decisions for the company.
After certifying as a WOSB, female owners are eligible to compete in government contracts specifically set aside for underrepresented businesses. In 2022, this contributed to an additional 5% of contracts set apart from the market-at-large. The Biden administration awarded $30.9 billion dollars to WOSB through eligible contracts in 2023. And in late 2024, the SBA amended the certification process, making it simpler for women-owned businesses to certify. For example, small businesses certified under SBA’s Veteran-Owned Small Business (VOSB), Service-Disabled Veteran-Owned Small Business (SDVOSB) or even 8(a) programs may use their existing certification documents when applying for WOSB status.
Explore funding options from trusted, online lenders
There is good news for underserved borrowers—and particularly women—when it comes to FinTech. Funding is largely objective, based on numbers and analytics. However, technology helps erase some biases—even implicitly applied—to gender, appearance, race, age or any other potentially discriminatory factor. Some AI-powered financial tools are helping to minimize gender bias in lending by using algorithms to analyze data objectively. The goal is to identify and mitigate historical patterns of discrimination against women in credit scoring. Loan Mantra’s AI-powered platform enables lenders to make unbiased decisions on applications based on a wide range of factors. Our technology provides greater credit access for women business owners who may have been unfairly excluded in the past.
In a hyperconnected world, female borrowers can learn a great deal about their funding source through online networks. It’s increasingly possible for underrepresented borrowers to learn about a company’s mission through online platforms or endorsements. Some immediate questions to ask when doing this online vetting are: Does the company share a message that appeals to you as a female entrepreneur? Do you share similar goals? Does your lender share a vision that’s inclusive of the broader community? In the same way that borrowers intend to do good business with honest people in real life, it’s important for every borrower to vet their financial partners and to avoid payday lenders.
Know your worth
Bankers speak ROI. The savviest women-business owners know their business plan in-and-out, and can speak to their market position with researched data, facts, and projections. If a female business borrower feels they may be perceived as a “risky investment” by a financial institution, they counteract discrimination with information.
Additional resources for developing a business plan are available for women who want data support in their planning. For instance, dreambuilder.org provides free assistance, online demos and more. Private grant opportunities are also available through incubators and charitable arms of large banks or corporations. Grantsforwomen.org can help underserved entrepreneurs locate and learn the terms to apply for additional funds. In some cases, these programs provide access to grant capital or additional resources, such as marketing help aimed specifically for women-owned business. Loan Mantra offers expertise and can securely store important financial documents until they are ready for a loan or grant application.
Need some help? Here’s a few other statistics to defend your case:
- Women outperform men by 8% when it comes to crowdfunding.
- Private tech companies led by women achieve 35% higher ROI than their counterparts.
- Women start approximately 1800 business/day.
- Of the businesses started today, 63% were founded by women of color
As a female business owner, you are an important driver of the U.S. economy. Loan Mantra supports and champions women-owned businesses every day of the year.