Microloans and Women-Owned Businesses | Accion Opportunity Fund
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Microloans and Women-Owned Businesses

Want to learn more about how microlending can support your business? Here are some comprehensive statistics on funding for women-owned business, plus why microloans are important for women-owned small businesses.


You know that you need money to start a business. And access to loans, investor backing, or grants for funding are especially important for women-owned businesses. The sad reality is that women have a harder time securing business loans or investors than their male counterparts. This funding challenge is, even more, pressing for minority women.

Microlenders offer an affordable way for women-owned businesses to secure competitive rates on loans so they can get their small businesses up and running. Microloans are not only a smart option for business funding, but these loan programs also provide lendees with mentoring and business resources to help make fledging businesses a solid success from the outset.

The State of Women-Owned Businesses: Growth and Funding

The 2019 State of Women-Owned Businesses Report, commissioned by American Express, recorded disheartening trends about funding for women in business. This report aimed to “provide data and insights that the women’s entrepreneurial ecosystem — policymakers, funders, supporting organizations, educators, researchers, and the media — can use to create policies, advance advocacy efforts and establish programs and initiatives conducive to women starting and growing thriving businesses.” Another critical goal is to motivate the “key players” invested in the success of women entrepreneurs to further their current practices in the service of continued growth, as one key conclusion from the report suggests that “the potential of women entrepreneurs for spurring economic growth has not been fully realized.”

Among other key findings, this report highlights that despite the rapidly accelerating growth of women-owned businesses (over the past five years, the growth rate of women-owned businesses clocked in at 21%, in contrast to a 9% growth rate for businesses overall), a glaring revenue gap exists between women-owned businesses and all privately held businesses. In fact, this revenue gap has increased in recent years, with women-owned businesses in 2019 generating 30 cents for every dollar generated by a privately owned company (as compared to 37 cents to the dollar in 1997).  Furthermore, women-owned businesses in 2019 “averaged earnings of $142,900 compared to $474,900 for all privately held businesses and $1.4 million for all firms.”

Though these trends reflect a complex set of financial and societal patterns, access to and utilization of funding opportunities likely play a key role in perpetuating the existing disparities. SCORE’s Megaphone of Main Street: Women’s Entrepreneurship Report reveals several notable statistics related to funding of women-owned businesses:

  • Men are more likely to seek out financing for their businesses (in 2018, 34% of men sought financing for their businesses compared to 25% of women).
  • Men were also more likely to succeed in obtaining funding, including loans and equity funding (38%, compared to 30% of women).
  • Women relied more heavily on credit cards (46% of women compared to 39% of men) to fund their business ventures.

How Can Microloans Help Close the Business Funding Gap for Women?

It’s clear from the historical data that lending, funding, and investment opportunities for women-owned businesses need to improve. Fortunately, even if traditional lending options or investor funding falls short, microloans are available for motivated women seeking to start their own small businesses.

Mircoloans are specialized business loans available through nonprofit, community-based organizations. These loans generally have a maximum borrowing cap of $50,000, making them affordable for brand-new businesses. The overarching philosophy behind microloans is providing qualified small businesses with start-up funding, as well as mentoring, training, and educating new business owners. It’s not just about getting a business off the ground – it’s about setting them up for success. And encouragingly, there is some preliminary evidence to suggest that women are receiving their fair share of microloans, with 57.4% of the SBA Microloan program’s loans going to women-owned businesses.

Microloans aren’t exclusively for startups. Microloan funding may also be used to give existing businesses a financial boost in order to grow and expand current operations. Qualifying entrepreneurs may use microloans for working capital, business leases, paying employees, business office supplies and costs, insurance, business licensing fees, continuing education, or to purchase inventory. Certain microlending programs do have clearly-delineated restrictions, so it’s important to first review how you plan to spend the funds with your lender to ensure you’re compliant.

Don’t Let It Get You Down

While we’ve made great strides in equality in recent history, the playing field is still far from level. The good news is that even if traditional lenders aren’t open to you, you still have options. Microloans help level the funding playing field for traditionally disadvantaged business owners, such as women, veterans, or minorities.

To explore whether applying for a microloan may be the right funding choice for your small business, visit Accion’s interactive webpage. For thorough information on government grants, educational programs, and networking opportunities available to women entrepreneurs, visit Resources for Women-Owned Businesses.


Thank you to the Coca-Cola Foundation for supporting Accion Opportunity Fund in expanding economic opportunity for women business owners.

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