4 funding options for women entrepreneurs

Funding for female entrepreneurship is reaching new heights. In the first six months of 2021, companies with a female founder or co-founder raised over $25 billion dollars – an amount never seen before in an entire year, yet alone in half that time.1 Yet, even with this record-breaking number, there’s still a lot of room for growth. As recently as 2020, women-owned businesses accounted for less than three percent of venture capital funding.2

Venture capital is only one of many ways to finance a new business. Some successful entrepreneurs get started with their own personal savings or a little help from family and friends. Today, just as the amount of funding is expanding, the range of financing options for women business owners is also increasing. Let’s take a look.

Apply to join a business incubator or accelerator

Joining an incubator or accelerator may be a surprising first suggestion for raising money for your company, but it highlights an overlooked lesson in business: do not go it alone.

Accelerator programs tend to be intense, short-term programs that boost entrepreneurs who already have a minimum viable product (MVP). In contrast, incubators often welcome founders who are just starting out and may host them for a longer period of time.3 Both incubators and accelerators usually offer opportunities to meet fellow entrepreneurs, as well as experienced experts who can give advice on everything from financial planning to product sourcing and more. Additionally, these programs are often connected to a network of potential investors and may even be hosted by an investment company.

Research grants for your company

Before you take on business debt, take the time to research grants for your company. The federal government offers a wide variety of grant opportunities, and Grants.gov is a great place to start. The Small Business Administration (SBA) is an excellent resource, too. The SBA sponsors dozens of Women’s Business Centers across the United States, where female entrepreneurs can benefit from a range of services, including business counseling and connecting to new funding possibilities.

In addition to federal resources, many state and local governments have grant programs for women business owners. Also consider private grants such as those from the Amber Grant Foundation which gives $25,000 to a woman-owned company every month.

Whole life insurance converts into a cash resource

Most people know that whole life insurance can provide a financial safety net for your loved ones in the event of your premature death. But it is less commonly known that a whole life policy also offers living benefits by providing accessible  cash for major events during your lifetime.4,5 As you pay your monthly premium, part of your payments accrue as a cash asset. This money then becomes available as needed, such as when you’re ready to start your new business, or cover expenses once it gets going.

Explore different loan options

Borrowing money to build your business is always an option, too. Keep in mind that similar to getting a mortgage on your house, loan rates vary based on personal credit history. Take the extra time to ensure you secure the most competitive interest rate you can.

Also, an investor or grant organization will need to review your business plan before financially supporting your company. A bank, however, may provide a loan without this requirement. In this case, it’s up to you to make sure your business plan is solid and your company has true earning potential. Loans can be a great tool for starting or expanding your company, but you don’t want to take on debt without a clear business plan. Once your business plan is ready, the SBA is a great place to research loans, as well as grants.

As the growth in funding for female entrepreneurs shows, this is an exciting era for women-owned businesses. If you want to bring your business idea to life, talk with a financial professional about the different funding options to make it happen. Financial professionals can help you develop a custom plan that supports both your business and personal goals for the long term.

Brought to you by The Guardian Network © 2021. The Guardian Life Insurance Company of America®, New York, NY. 

2022-133717 Exp. 2/2024

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1 The US VC Female Founders Dashboard, Pitchbook, January 4, 2022

2 Female Founders Are Having a Standout Year–That’s Not the Full Story, Pitchbook, August 26, 2021

3 Incubator vs. Accelerator: What’s the Difference?, Hubspot, July 5, 2019

4 Some whole life policies do not have cash values in the first two years of the policy and don’t pay a dividend until the policy’s third year. Talk to your financial representative and refer to your individual whole life policy illustration for more information.

5 Policy benefits are reduced by any outstanding loan or loan interest and/or withdrawals. Dividends, if any, are affected by policy loans and loan interest. Withdrawals above the cost basis may result in taxable ordinary income. If the policy lapses, or is surrendered, any outstanding loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under 59 ½, any taxable withdrawal may also be subject to a 10% federal tax penalty.


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