Featured Expert
April Gilbert
April Gilbert Program Director,
SoMa Renaissance Entrepreneurship Center
View bio

This guide was written by

Mary Purcell

Women have made great strides in business ownership in recent years. In 2012, there were around 9.9 million women-owned businesses in the United States — a nearly 27 percent increase since 2007. Women-owned firms account for about 36 percent of all small businesses and generate about 1.4 trillion in receipts, according to a 2012 survey conducted by the National Women’s Business Council (NWBC).

But women entrepreneurs still face hurdles, especially in securing financing to start or grow their businesses. Whether seeking a business loan or venture capital, women still find themselves at a disadvantage. According to the National Women’s Business Council:

Male-owned small businesses receive 4x
more venture capital funding than
small businesses owned
by women.

Women-led companies receive only
16 percent of conventional loans,
and only 4.4 percent of small business loan
dollars, meaning only $1 of every $23 in
conventional small business loans goes to
a woman-owned business.

On average, men start their businesses with
nearly twice as much capital as women
($135,000
vs. $75,000). This disparity is even greater among firms
with high-growth potential ($320,000 vs. $150,000),
and much larger in the Top 25 firms ($1.3 million
vs. $210,000).

Only 5.5 percent of women-owned businesses
take out bank loans to start their small
business. That rate is more than double
(11.4 percent) for men.

According to a 2009 survey of National Association of Women Business Owners (NAWBO) members, the most common sources of funding for women is personal savings, friends and family. Women are less likely to use lines of credit, financial leases and equipment loans, and more likely to rely on credit cards to finance business expenses.

Top Business Loans for Women Entrepreneurs

Loan/Fund Name Typical Amount Requirements
Women’s Business Loans [Women’s Chamber of Commerce] Up to $300,000
  • $75,000 or more in annual sales

  • Must own at least 20 percent of business for at least two years or more

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Lending Circle $25,000 to $500,000
  • Good credit rating

  • In business for two years

  • Minimum annual revenues of about $150,000

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Tory Burch Foundation $500 to $100,000+
  • Links eligible entrepreneurs to community lenders.

  • Criteria: sustainable business, a satisfactory credit rating, at least two years in business and a passion for growth.

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Kiva US Up to $10,000 in no-interest loans over three years
  • Use the loan for business purposes.

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Better Finance $30,000 to $350,000
  • Good credit

  • At least two years in business

  • Enough cash flow to make payments

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Pacific Community Ventures $10,000 to $200,000
  • Located in California

  • In business for at least one year

  • Have at least two employees

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Women’s Economic Ventures $250 – $50,000
  • In Santa Barbara or Ventura County

  • Loans over $5,000 need written business plan

  • Must own and control at least 51 percent of the business.

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California Capital Women’s Business Center $5,000 to $1.7 million
  • Funds must be used in California for equipment purchase, contract financing, business expansion or working capital.

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Mainstreet Launch $10,000 to $250,000
  • Business based in Oakland or San Francisco, CA, or a veteran-owned business

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Working Solutions $5,000 to $50,000
  • Located in Bay Area

  • Prioritizes women, minorities and low-income borrowers

  • Loan request denied by a bank

  • At least one year paid industry experience.

  • Good credit

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Wisconsin Women’s Business Initiative Corporation $1,000 up to $100,000. Up to $250,000 with an SBA guarantee
  • Wisconsin resident, age 18 or older.

  • Must be used for: machinery, equipment, furniture, fixtures, improvements, inventory, supplies or working capital.

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SBA-Backed Loan Programs (Actual loans are funded through intermediaries, but guaranteed by SBA)
SBA Microloan program Loans up to $50,000; average loan is $13,000
  • Each lender has its own requirements, but usually require collateral and a personal guarantee from owner.

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SBA Intermediary Lender Program Loans up to $200,000 through intermediaries
  • Each lender has its own requirements, but usually require collateral and a personal guarantee from the owner.

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SBA Export Express Loan Up to $500,000
  • Must be in business for at least 12 months

  • Must use loan to promote export businesses

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How to Apply for a Business Loan

There are many different avenues for business loans. In addition to traditional commercial banks, you can get loans from microenterprise development organizations, local economic development agencies and non-profit organizations around the country. Doing some research and leg work ahead of time is important to landing a loan that’s right for you. Keep these steps in mind:

Order your credit report

Do this from a credit rating agency before you approach a lender. You may be surprised by what you find. There could be errors on your report or bad marks that you had forgotten. Try to clear up any problems before you apply for funding.

Identify a lender whose terms will work for you

This may be your local bank or one of the many lenders mentioned on this page. Your local Women’s Business Center, Small Business Development Center or SCORE mentor can help you identify the best lender for you.

Review the application and requirements

Different lenders will have different criteria and forms to fill out, but generally, the SBA recommends that you be prepared to explain:

  • Why you are applying for the loan
  • How the funds will be used
  • What you will purchase (and from which suppliers)
  • Who your management team is and what kind of experience they have
  • How your anticipated revenue will allow you to repay the loan
Hone your business plan

Detail your management team’s experience, your position vis-a-vis the competition and your list of clients. Also do your homework about the state of your industry. Is it a growth industry, or is it depressed? Lenders want to see that your business is likely to thrive. The SBA also recommends having a written summary of your project and your funding needs as part of your business plan, highlighting what makes your small business special.

Determine your financial needs

It is always better to anticipate your needs ahead of time than to approach a lender when you are in a financial crisis. If you are just starting out, consider the cost of housing your business, purchasing equipment and buying inventory. Estimate the cost of doing business for the first few months.

Prepare the required financial and legal documents

These may include detailed financial statements, cash flow projections, tax returns, business licenses and articles of incorporation, among others.

Submit your application

It’s a good idea to have someone look over the application and all of your documentation before submission. This could be an advisor from the Women’s Business Center or SCORE. Avoid being one of the many people whose applications are bounced back because they are incomplete.

Alternative Funding Options: Venture Capital and Angel Investment

In addition to traditional bank loans, women entrepreneurs are increasingly relying on venture capital and angel investors to fund their firms. Both venture capitalists and angel investors invest directly in your business in exchange for some equity in the company.

Angel investors are individuals with significant resources who want to invest in startups or growing businesses. They are much more likely to fund businesses in an early stage of development than are venture capitalists, and they often seek to share their expertise and networks with the entrepreneurs they fund. In 2014, angel investors invested $24 billion in over 73,000 companies. Like venture capitalists, they expect a return on their investment.

Venture capitalists raise money from investors and manage asset funds to provide large-scale funding to young, high-growth companies In exchange for their investment, they usually expect to share ownership of the company in the form of shares and a seat on the board, among other things.

Venture Capital and Angel Investors

Investment/Fund Name Typical Amount Requirements For More Information:
Golden Seeds Network $250,000 – $2,000,000
  • Strong management team

  • Scalable business model Addressable market of at least $1 million.

  • Limited capital expenditure requirements.

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Female Founders Fund Varies
  • E-commerce, media, web-based services.

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BELLE Capital LP $100,000 – $1.5 million
  • Female founder or owner and committed to recruiting top women managersLarge or fast growing business

  • Large or fast growing business

  • Can reach $20+ million in revenues within five years

  • Urgent problem to be solved

  • Face significant barriers to competitive entry

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Springboard Enterprises Varies
  • Women-led companies

  • High-growth companies

  • Funds for product development or expansion

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The Women’s Venture Capital Fund Varies
  • Digital media and sustainable projects are their focus.

  • Gender-diverse, experienced management team

  • West Coast-based

  • High-growth potential

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BBG Ventures $100,000 – $250,000
  • At least one female founder, focused on consumer internet and consumer tech sectors

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Women’s Capital Connection Average funding about $157,000. To date 14 companies have received $2.2 million.
  • Located in the Midwest region

  • Potential for rapid growth

  • Proprietary technology, early market lead or other strong barriers to entry.

  • Strong management team

  • Desire for mentoring and coaching

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Intel Capital Diversity Fund Varies
  • Founder or at least three members of management team must be women or underrepresented minority

  • Ideally show some strategic alliance to Intel’s business

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Astia Varies
  • Sectors: high tech, life sciences, clean tech, consumer tech, and high growth consumer products and services.

  • Must have at least one woman on leadership team

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37 Angels $50,000 to $150,000
  • All sectors, open to women and men applicants

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Maya Venture Partners Varies
  • Black and Latina led high growth companies

  • MVP runs the Harriet Fund, an early stage venture fund, and the Harriet Angels Syndicate, a seed stage angel syndicate

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California Investment Network Usually up to $1 million
  • Located in Alaska, California, Hawaii, Nevada, Oregon, or Washington

  • This is a matching service that costs a minimum of $199 to be paired with investors

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Pipeline Summit Varies
  • Woman co-founde

  • For-profit

  • Social and/or environmental mission

  • Legally based in in a U.S. state

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For more information, try the Digital Database of Female Investors. This is a database of women angel investors that you can search by stage of business, geographic locations, and industry.

Crowdsourcing

Some women who’ve worked in the tech industry have launched their own businesses using contacts they’ve made there. (See MoneyGeek’s guide on startup financing to learn more.) Increasingly, women entrepreneurs are turning to crowdsourcing sites like Indiegogo and Kickstarter to fund their small businesses. In fact, women are more likely to succeed than men in crowdfunding, according to the National Women’s Business Council. Because women tend to be more active on social media and are often more collaborative, crowdsourcing provides an excellent opportunity for them. Below are a few popular crowdsourcing sites, and you can find many more online.

Name of Site Amount Provided How It Works For More information:
Indiegogo Varies
  • You launch your campaign and pay 5 percent to Indiegogo and approximately 3 percent to a third party payment processor

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Kickstarter Varies
  • Kickstarter campaigns usually cater to creative business ideas

  • Funding is all-or-nothing, meaning that if the campaign doesn’t reach its target, no one is charged and you don’t get any money

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Peerbackers Varies
  • Founded and led by a woman, this focuses on funding and consulting for entrepreneurs

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Breakaway Funding Varies
  • US-based, for-profit company

  • Business plan, financial statements, management information

  • No criminal record

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Grants for Women-Owned Businesses

There are a number of private grant-making agencies and foundations that fund women-owned businesses (see below). It’s worth trying to find people who have received the grant you are interested in and talking with them about the application process.

Grant Typical Amount Description of Requirements For More Information:
The Amber Grant Program awards One $500 grant per month and one $1,000 grant per year
  • Women with a strong idea for a business

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InnovateHER Three cash prizes:
1st: $40,000
2nd: $20,000
3rd: $10,000
  • Has a measurable impact on the lives of women and families

  • Has the potential for commercialization

  • Fills a need in the marketplace

  • May not be awarding grants in 2017, but offers free consultations to female entrepreneurs

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Eileen Fisher Gives a total of $120,000 for up to 10 grants per year (minimum grant $12,000).
  • Majority women-owned and women-led

  • In operation for at least three years

  • Revenues under $1 million

  • Business dedicated to environmental and social change

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Open Meadows Foundation Under $2,000
  • Organizational budget must be under $75,000

  • Project must be designed and implemented by women and girls, reflect the diversity of the community, promote community power and have limited financial access

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Small Business Innovation Research (SBIR)/Small Business Technology Transfer Program (STTR) Varies
  • Grants to small, independent businesses that contribute to federal research and development; based on government solicitations

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The Halstead Grant $7,500 cash grant, $1,000 toward jewelry supplies, and marketing via the company’s website and social media.
  • Jewelry designers with businesses under three years old

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Mission Main Street Grants Provides 20 grants of $150,000 annually
  • Run by Chase bank. Applicants must be for-profit small businesses in operation for at least two years with fewer than 100 employees

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National Association for the Self-Employed (NASE) Small Business Grants Program awards one $4,000 grant per month
  • Must be a NASE Member in good standing

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FedEx Small Business Grant Contest $7,500 to $25,000
  • Annual competition for:

    • For-profit small business in good standing
    • In continuous operation for at least six months
    • 50 or fewer employees
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Idea Café Small Business Grant $1,000
  • Sign up as an Idea Café Regular

  • Present an innovative business idea

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A New America Foundation Microenterprise: May include one-to-one match in capital
  • Works with underserved populations in the San Francisco Bay Area offering microbusiness incubation

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How Do Grants Work?

Unlike loans, grants do not need to be repaid. Contrary to popular belief, the federal government does not generally provide grants to start or grow your business. Federal grants typically go to non-commercial endeavors like non-profit organizations or educational institutions.

Some federal government grants may be available in certain industries that the government wants to promote – such as scientific and medical research and environmental conservation. These grants are offered through the Small Business Innovation Research (SBIR) office. To qualify, you much be engaged in research and development in one of the areas identified by the agency. You must also be a US-based for-profit business with fewer than 500 employees. For more information on the program, visit the SBIR website.

State and local governments and non-profit organizations sometimes offer grants, but they are usually small, hard to obtain, and often require matching funds. To find out if your city has such grant opportunities, contact your local Women’s Business Center or your local office for economic and community development. There may also be training grants available for you or your workers.

How to Apply for a Grant

1
Figure out if this is the best way for you to finance your small business

Applying for a grant is often a very time-consuming process, and there is usually a lot of competition for relatively little money. Many experts will tell you that chasing after these scarce resources is not the best way to get capital for your business.

2
Research the best grant opportunities for you

Most grants have very specific criteria for eligibility. Search online and check with your town’s local economic development office, local Women’s Business Center, and Small Business Development Center to ask about any grant funding that might be available.

3
Take a look at the previous grantees

to determine what made them stand out. If possible, try contacting one or two previous grantees and ask for their advice on how to make yourself stand out.

4
Get your financial house in order

Be sure your credit report, financial statements, and business plan are ready to go when the right opportunity arises.

5
Prepare a grant application or proposal

Most grant-making organizations will have their own application form to fill out, but some may just ask you to submit a proposal following their template. Writing a persuasive proposal is critical to your success, so if that is not your strong suit, consider hiring a grantwriter to help you.

Note: Procurement contracts may be more lucrative than grants. If you are a female business owner with substantial inventory and revenue, you may want to consider applying for a Women Business Enterprise (WBE) certification. This won’t get you a grant, but it will give you access to corporate and government procurement contracts that are reserved for women-owned businesses. To qualify, your business must be at least 51 percent owned by a woman in the US. It is a rather lengthy application process, however, and may only be worth it if you are able to fulfill large contracts. For more information on the program and eligibility requirements, visit the certification web site.

Growing Your Network of Female Entrepreneurs

When reaching out for help, many women entrepreneurs prefer to join women-only affinity groups, according to Entrepreneur magazine. Among other things, Entrepreneur notes, women often find other businesswomen to be more compassionate and helpful and feel more at ease in women-only associations. Some groups offer seminars in business financing, grant writing and startup incubation, while others feature regular social events with female CEOs and meet-ups with venture capitalists and angel investors. Here are some of the many networking opportunities available to you:

Networking Group Background What It Offers For More Information:
Women’s Business Centers Nearly 100 SBA-backed centers around the country dedicated to helping women entrepreneurs
  • Training and mentoring in business development

  • Conferences

  • Classes

  • Networking opportunities for women entrepreneurs

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Women’s Entrepreneurial Network Global network of internationally-minded women entrepreneurs, based in Paris. Founded in 2013.
  • Networking events and other opportunities to share knowledge, best practices, contacts and to benefit from strategic partnerships.

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Women 2.0 Founded in 2006 with a mission to strengthen technology businesses by connecting, inspiring and educating the next generation of technology leaders.
  • Twice-annual conferences to explore trends in innovation, blog for members, pitch conference competitions, and monthly city meet-ups for networking.

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Digital Women’s Network British-based network for women who work in digital media
  • Offer events, training, and some funding opportunities.

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Ladies Who Launch Network devoted to providing inspiration and advice to women entrepreneurs
  • Free events, workshops and advice.

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eWomen Network Founded in Dallas, TX in 2000, eWomen Network produces over 2,000 women’s business events per year.
  • Helps women entrepreneurs:

    • Acquire more clients and customers
    • Market their businesses
    • Get access to resources
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Meetups for Women Entrepreneurs Over 3 million members involved in meetups around the world
  • Look for a local chapter near you to network with other women entrepreneurs

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Xperience Connection Previously called The Joy of Connecting, a networking opportunity for women entrepreneurs
  • Locations around the country where women can connect, learn about each other’s products/services and promote business growth.

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National Association of Women Business Owners (NAWBO) Founded in 1975, a dues-based organized devoted to advancing the interests of women entrepreneurs
  • Hosts events around the country, offers a wealth of information and advice to members, advocates for public policies that advance the interests of women entrepreneurs.

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US Women’s Chamber of Commerce National association helps women start and grow businesses and careers, access government contracts.
  • Offers financing through their newly established credit union.

  • Advocates on behalf of women

  • Certifies women-owned businesses

  • Holds conferences and other educational events

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Expert Q&A (500 words)

expert

April Gilbert is Program Director at SoMa Renaissance Entrepreneurship Center in San Francisco. She also serves as acting director of the Women’s Business Center there and has a long history of promoting entrepreneurship among women.

How can women-owned businesses show lenders that they are good candidates for a loan or grant?

You stand out by doing your homework. This is no different for women than it is for men. To be a good candidate for a loan, you need three things:

1

Expertise in the industry in which you’re starting your business. If you want to start a coffee shop but have never worked in a coffee shop, you won’t get a loan. We recommend people have at least 6-12 months’ experience in the industry first.

2

A decent personal credit score. You should look at it and if there are any problems, try to fix them before you go for funding. We can help people work on their credit score if they have trouble with that.

3

A business plan with two-year financial projections. We have a 14-week planning class for women and men entrepreneurs. At the end of the class, you have a business plan and are ready to approach lenders. If you already have a business plan, we can help look it over and provide advice.

If you have those three things, you are ready. Of course, it matters what your business idea is. Lenders want to know whether you are going to make enough money to pay the loan back.

How can female entrepreneurs determine how much money they should take out for their businesses?

When you’re looking at how much you need to borrow or raise, it’s very important to do a business plan with financials. You need to calculate your startup financing requirements. Generally, you will want at least 3-6 months in working capital.

By the time you go to the lender, you should already have market information – including information about your target market, standard customer, pricing, etc. You will need that to develop your business plan. So when you’re planning for your launch that you need funding for, you’ve determined the amount of capital you need and what it will be used for.

Why is networking important?

Networking is really important for anyone but especially for women. One of the differences between men and women entrepreneurs is that women tend to have less confidence than men. On the bright side, this often means they are more willing to seek training and advice, which can be a benefit.

It’s important to be around other entrepreneurs to build your knowledge and confidence. Entrepreneurs learn from teachers, but they also learn a lot from each other. Networking is also very important for customer development and customer validation.

One of the indicators of success for women entrepreneurs is a willingness to not ‘go it alone’. This is one of the big differences between those who are successful and those who are not. People who quickly realize their weaknesses and go out and shore themselves up – finding help through friends, bartering, learning from others – are more likely to be successful.

Can you recommend any grant programs for women business owners?

Lenders lend; they don’t give grants. There are other sources of funding besides loans – like crowdsourcing – but to get a grant you usually have to be a non-profit, and there are not a lot of grant programs for small businesses.

What’s the most common source of funding for the women entrepreneurs you work with?

People who come to us usually use a combination of family support, crowdsourcing, and loans.

People usually start with family and friends, which can come in the form of a loan, a gift, or crowdfunding.

The other source of funding is a loan. Here [at the Women’s Business Center] we use non-profit loan funders. Banks don’t usually lend to startups. Our non-profit lenders usually provide loans in the $25,000 to $100,000 range, although they go up to about $250,000. The average annual interest on loans our clients get through the nonprofit loan funds is 8-9 percent. Some of the loans are SBA loans and some are simply loans from the nonprofits themselves.

I strongly suggest that startup entrepreneurs looking to borrow money work with the Women’s Business Centers because they will save a lot of time and energy and will help find the right non-profit lender for them.

Resources

National Association of Women Business Owners (NAWBO)

A national organization with local chapters around the country, NAWBO represents the interests of all women entrepreneurs from all industries.

Women’s Business Centers

A directory of the almost 100 SBA-backed Women’s Business Centers around the country that provide training and advice to women entrepreneurs.

SBA’s Office of Women’s Business Ownership (OWBO)

OWBO seeks to empower women entrepreneurs through advocacy, outreach, education and support.

American Business Women’s Association (ABWA)

A national association of women workers and business owners that provides opportunities for them to grow personally and professionally through leadership, education, networking support and national recognition.

Women Impacting Public Policy (WIPP)

A national public policy organization that advocates for women and minorities in business, creating economic opportunities and building bridges with other small business organizations.

National Association for Female Executives (NAFE)

One of the largest associations for women professionals and business owners in the US, NAFE engages in education, networking, and public advocacy to empower its members to achieve both career and personal success.

National Association for the Self-Employed (NASE)

NASE is provides access to benefits and resources to entrepreneurs and their small businesses. It provides legal and investment services and has a strong legislative advocacy program.

Grants for Women

An online tool to help women around the world find grants and scholarships.