Women-owned businesses are on the rise, but access to financing can be a barrier to launching and growing a business. Steer clear of risky funding options, and seek out supportive advisors who can help you get a loan that works for your business.

Women who start and grow small businesses face many barriers, particularly when it comes to funding and financing – and specifically in comparison to men who launch businesses. According to a recent study by the Federal Reserve Banks of New York and Kansas City, women-owned businesses are more likely to operate at a loss and have higher credit risk than are men-owned firms.

In addition, women-owned firms are more likely to experience financial challenges. For example, they’re less likely to receive loans, and often have to deal with “funding gaps” – that is, they don’t receive all of their requested funding. The study also shows that women entrepreneurs are also less likely to apply for loans because they fear (rightly, it turns out) getting turned down.

In spite of their financial struggles, more and more women are stepping up to launch their own businesses: Women are starting an average of 849 new businesses per day, and the number of women-owned businesses has doubled in the past 20 years, according to American Express OPEN’s State of Women-Owned Businesses report.

It’s clear that women aren’t letting roadblocks like financing and credit stand in the way of their entrepreneurial dreams. But in their quests for financing, they should avoid funding sources that could cause problems down the road, such as painfully high interest rates. In addition, some lending sources (such as Opportunity Fund) can be more helpful to women who are just starting out, since these sources will look at information beyond a credit score when considering a loan application. If you’re in the market for a small-business loans, here are some dos and don’ts to consider.

Do look beyond the big banks.

The Federal Reserve Banks study found that women-owned businesses were more likely to apply to large banks than to small banks as compared to men-owned businesses – yet, they were more likely to be approved for loans by the small banks. In addition, women who worked with small banks showed the highest levels of financing satisfaction.

Opportunity Fund considers different criteria from small-business borrowers, and we see your business in a different way than large banks typically do. We likely have the right loan* for you. Email us at loans@opportunityfund.org for more information about how we can help your small business.

Don’t get bogged down in loans that can hurt your business.

According to the bank study, women are more likely to use unsecured debt (that is, without collateral) to fund their businesses. This might include using credit cards, or Merchant Cash Advances (MCAs) and payday loans. These forms of financing can be risky because they take a percentage of your sales to pay off your debt, which can hurt cash flow.

In loans studied in the Opportunity Fund report Unaffordable and Unsustainable: The New Business Lending on Main Street, the average alternative loan carried an annual percentage rate (APR) of 94% (one loan was even at 358% interest). These lenders are not regulated as closely, and they often use deceptive marketing tactics and have hidden fees. For the health of your business, it’s best to avoid them.

Don’t be afraid to apply for loans – and do take advantage of advice and counseling.

At the moment, women-owned businesses don’t get approved as often as men-owned businesses do – but women should strive to close this gap! When women work with organizations like Opportunity Fund, they can get help at every step of the loan process. For example, we offer borrowers a loan preparation checklist so they know which documents to prepare before they apply.

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.

Loans are subject to credit review. Additional documentation may be required for credit approval. We are an Equal Opportunity Lender. Loans will be made or arranged pursuant to California Department of Corporations Finance Lenders License #6050609.


Opportunity Fund is tackling economic inequality so that hard work and perseverance means a shot at getting ahead, not just struggling to get by. Our programs are supported by a community of donors and investors whose contributions help to fund small businesses, support college students, and build stronger families and vibrant neighborhoods. Since 1994, the team has deployed $700 million and helped thousands of families earn, save and invest in their own futures. Opportunity Fund has earned a 4-star rating from Charity Navigator, America’s largest independent charity evaluator, for our commitment to accountability and transparency.

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