If you are a female who currently owns or is starting up a business, you’re probably working towards a goal of financing that business. It’s already tough for most new business owners to get the funding they need to grow, but businesses that are exclusively female-owned have to work even harder to get it. Usually when people talk of financing a business, they’re talking about getting a loan or selling off equity to investors. But women-owned businesses may also be able to get funding through grants, just like college students can get scholarships to pay for part or all of their schooling. Business grants are technically free money, though they usually do have strict application requirements to get them.
Who Offers Women-owned Business Grants?
There are a number of organizations offering grants for female-owned businesses, and some come from the government. But many of them are from nonprofits founded by other entrepreneurs who have already built successful companies, and now want to help others succeed in building new companies. Now women aren’t the only ones who can receive grants. There are some that are aimed at minority entrepreneurs and minority business zones, and others for any entrepreneur who lacks the means to start a business without financial assistance. But since there is often a gap in lending between female entrepreneurs and their male counterparts, these grants for women seek to help bridge that.
What Do Women Entrepreneurs Need To Do To Qualify For A Grant?
Getting a grant can take work, and you need to convince the organization offering the grant why you deserve it. Also, there’s often a limited amount of grant money the organization can give out each year, and therefore a lot of applications they have to weigh through. Each organization offering grants has their own qualification requirements, but here’s a few that are usually listed:
You need to meet a minimum age requirement
You need to be a woman who either completely owns or owns a majority stake in the business
You need to make a certain amount of revenue
You will usually need to have been in business for a minimum of one year, though possibly less
You may need to be in a certain industry, or embrace a certain social or environmental cause
What Can You Use Grant Funds For?
Just as organizations limit who can receive grants for women to start a business, some may also limit what the funds can be used for. For example as Lantern Credit has discussed, some grants may need to be used specifically for scientific research or certain business initiatives, while others can fund general operational costs. This is something to keep in mind when applying for grants in that they can have stricter usage requirements than business loans.
Are Grants Really Better Than Loans?
This really depends on where you are in your business starting stage, and how much funding you’re looking to get. In some ways grants can be better than loans in that they aren’t money you’re borrowing, and aren’t technically investments either. They’re basically gift money intended to help women-owned businesses that don’t have deep pockets to start with.
On the flipside, most grants offer significantly less funding than loans, and in some cases they may have more strings attached than loans in how they’re used. And as previously mentioned, the competition for getting a grant can be tough, and getting approved for one can be more difficult than getting a loan. Both can be hard for very early stage startups to get.
In conclusion, business grants for women certainly are something to put effort into getting. You just need to make sure they fit what you’re trying to do with your business, and don’t assume that loans are completely off the table either.