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    Women: Starting and Financing a Business

    Women entrepreneurs continue to contend with daunting obstacles in the world of business, particularly when they’re just starting out—and seeking financing.

    The numbers tell a big part of the story. According to a report by the Federal Reserve banks of New York and Kansas City, women owned businesses reported having lower revenues and fewer employees than men owned businesses during all stages of growth. Women-owned businesses also faced more profitability challenges at early stages of development and had higher credit risk with 41% compared to 33% for men-owned businesses.

    But despite facing challenges, women owned businesses have more than doubled in the last twenty years, according to the American Express’s 2017 State of Women Owned Businesses Report, The report states that women are starting an average of 849 new businesses per day which has increased by 3% since 2016.

    That’s why the U.S. Small Business Administration (SBA), other government agencies, and many women-led nonprofit initiatives are focusing so much effort on supporting women business owners in evening out the gender gap.

    SBA’s Women’s Business Centers
    If you’re a woman looking for help in launching and growing your business, the SBA’s Women’s Business Centers (WBCs) could be a valuable resource. These centers are one-stop shops for business advice and training. There are about 100 WBCs located across the U.S. and its territories. Each WBC tailors its offerings to its community, which may include counseling in several languages. You can access training in business planning and management, marketing, navigating the loan application process, and other relevant topics. These services are free.

    Other SBA Services—Including Loans and Government Contracts
    The SBA offers a range of additional services to help small business owners get a good start. Some are tailored to women, others are available to anyone with a solid business plan for a new startup. The SBA’s small business loan program, for example, does not have specific set-asides for women entrepreneurs, but it doesn’t discriminate. According to the SBA, its loans are three to five times more likely to go to women than non-SBA loans.

    Here’s how the SBA loan program works: You apply for a loan at a local bank, which in turn processes it and applies for a guarantee from the SBA. The SBA will guarantee your loan if your application meets its guidelines. SBA loans typically have less onerous requirements for owners’ equity and collateral than most commercial loans. Two of the most common SBA loans are the 7(a) Loan (a general business loan), and the SBA’s Microloan Program. In 2011, for example, about 54% of all SBA microloans went to women-owned, or majority-women-owned businesses.

    The SBA also oversees the Women-Owned Small Business (WOSB) Federal Contract program, which sets aside designated federal contracts for eligible women-owned small businesses. You can learn more about these opportunities in the “Opportunities for Women-Owned and Disadvantaged Small Businesses—and Others” section of the Government Contracting article in this Playbook.

    Other Resources, Including Networking and Mentoring
    For many women getting their start as business owners, hearing war stories and getting mentoring from other women in business can make all the difference. There are a number of nonprofit organizations focused on helping women get ahead in the business world. For example, the National Association of Women Business Owners (NAWBO) performs advocacy and offers networking opportunities like training sessions and conferences. NAWBO has many local chapters across the United States.

    Another great source of local training and mentoring can be your community’s small business development center (SBDC). There are about 1,000 of these in the United States. Funded by the SBA, state governments, and local educational institutions, these business development agencies are located in every state, and offer an array of technical assistance services to aspiring business owners at little or no cost. Here’s a link to their location finder: SBDC locator.

    If you’re seeking a mentor, local affinity groups can be a great source of mentoring opportunities. And don’t overlook SCORE, whose 11,000+ volunteer members are all experienced business people dedicated to helping others get a good start in business. SCORE’s educational offerings include workshops and one-on-one mentoring. Even more opportunities are available after getting your woman-owned business certified.

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    • The best place to start your learning process is SBA’s web section dedicated to women-owned businesses.
    • This SBA site offers online trainings on small business financing.
    • Here’s where to learn more about SBA loans. For more information on WOSBs, start with SBA’s web section on government contracting for women-owned small businesses.
    • Sometimes an inspiring story can be a great motivator. The Story Exchange is a nonprofit that shares the stories and experiences of women entrepreneurs around the world through videos and articles. Their website also offers startup advice and resources. The site includes a page with numerous links to sources of training and funding (including crowdfunding and venture firms) that focus on opportunities for women: Business Toolbox.
    • If you’re looking for an affinity group, you might simply try a web search of your area of business interest with the name of your town or city. Also, many cities include affinity group links in the economic development section of their website.