Starting a small business is a tough enough task no matter who you are. But, for female entrepreneurs, there are even more obstacles than  their male counterparts may face. While the lending gap is narrowing, the ability to find funding is one of the areas where women still face more issues.

Since there are several hurdles in the way of accessing the necessary funding for small businesses, female entrepreneurs should take the time to assess all of their options. When you understand all of your choices, you are more likely to select the right funding option and you are more likely to get approved.

The following are some of the funding options that will be available to female entrepreneurs.

Loans

There are many different types of loans that female entrepreneurs can look into. Most offer favorable terms as long as you can prove your business is viable. A good way to improve your chances of securing a loan is to prepare any documentation or paperwork before meeting with a lender, as this will help you appear organized and reliable. When considering what type of loan would be most suited to your business, keep the following points in mind:

Term Loans

A traditional term loan from a bank is a place many small business owners will look when trying to find funding. Term loans are great for long-term funding goals and they usually come with low interest. Unfortunately, it can be difficult to get approval for a term loan. You have to have strong credit and the bank is going to want to see a history of revenue to prove you can pay it back.

Line of Credit

A line of credit is another option for female entrepreneurs. With a line of credit, you have a form of revolving credit that can provide you with quick access to cash in case you need it. In the past, lines of credit were only available to businesses with the best credit, but online lending options are now making them available to more businesses with varying credit histories. 

Online Lending

Online lending is another option that has made it easier for female entrepreneurs to gain access to funding. You can find both short-term and long-term lending products online, and there are even lenders who specialize in providing funds to business owners with bad credit. When you borrow online, you have access to a wider array of lending options, and you can usually count on the funds being available quickly. There are even some online lenders who offer same-day approval.

Microloans

Microloans are another option for women in business. As the name suggests, microloans are smaller loans that are great for small business owners who are unable to get approval for a larger bank loan. You will find several microlending platforms online, and there is even a microloan program from the SBA.

Equity Financing 

While taking on debt is a more common way for a small business to attain funding, there is also the possibility of equity financing. With equity financing, you exchange a stake in the company for the funding you need. 

Equity financing can be advantageous because the business is not required to pay the money back. Along with that, investment firms can offer insight and resources that can help your business grow. 

On the other hand, investment capital can be hard to come by for most businesses. Investors usually only work with companies that seem ready for significant growth. Even if you can win over some investors, you are also going to have to make some compromises. The investors are going to expect to have a say in the way the company is run.

Grants

Looking into grants could be another way to secure funding for a woman-owned business. The best part about grants is that they do not have to be paid back. That said, the eligibility requirements are usually strict and it can be hard to gain access to these funds.

If you want to consider grants as an option for funding a business, you should be prepared to do a lot of research and put a significant amount of work into the approval process. Along with that, you should make sure to research federal grants, grants from state and local governments, and grants from private organizations. As a female entrepreneur, you should also pay special attention to any grants for women business owners.

The important thing to understand about grants is that they can be very specific in their intentions. Most are aimed at helping businesses in specific industries or entrepreneurs in different regions. This is why research is such an important part of trying to receive one. There is a lot of grant money out there, but it will be hard to find ones your business is actually eligible for.

Funding a small business is a lot of work on its own.

For female small business owners, understanding your funding options is one of the keys to success. Take the time to assess the needs of your business and evaluate the different funding options that are available. You can then focus your efforts on getting the funding that is most suitable for your business.

Rae Steinbach is a graduate of Tufts University with a combined International Relations and Chinese degree. After spending time living and working abroad in China, she returned to NYC to pursue her career and continue curating quality content. Rae is passionate about travel, food, and writing.