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Access to capital often determines whether a business scales successfully or shuts down. It dictates whether a founder can transform their idea into a thriving small business, achieve growth, or struggle to survive due to insufficient funding.
From the countless entrepreneurs I’ve spoken to, the journey from idea to execution is often accompanied by the search for an investor or a bank loan to fuel growth. However, venture capital is much less accessible than shows like Shark tank may lead us to believe.
Business bank loans often present a paradox. They usually require historical sales and revenue data, which new businesses rarely possess. For startups, loans are usually secured by a personal guarantee, ensuring that the bank is repaid regardless of the success of the business. This places significant financial risk on the individual guaranteeing the loan, and many new founders may not meet the financial requirements for this option.
The most common route founders take to turn an idea into a business is bootstrapping, relying on personal savings, support from friends and family, or even credit cards. However, there are other unique ways to access funding and grow a business.
Here are some valuable resources to consider:
Mission-based lenders
Mission-based lenders provide an essential financing alternative for entrepreneurs facing challenges who qualify for traditional bank loans. “These lenders offer capital ranging from $500 to $250,000—amounts that may seem substantial, but still fall below the minimum limits many banks consider,” says Anna-Marie Cruz, Director of Business Development and Community Engagement .
Examples include nonprofits like Kiva and CDFIs like Accion Opportunity Fund, LISC, and CDC Small Business Finance. Entrepreneurs can find these and similar lenders by searching CDFI Small Business Lender.
Women-specific resources include Grameen America, which provides microloans to low-income women entrepreneurs, and the Women’s Business Development Center (WBDC), which provides financial assistance, loan programs, and tailored training for women business owners.
cherub
Have you ever been told to find an angel investor but feel lost, overwhelmed by endless networking events with no clear path forward? Cherub, founded by Jaclyn Johnson, Founder of Create & Cultivate, and Angeline Vuong, Head of Digital Products and former Head of Purchasing Products at Opendoor, is here to revolutionize the process.
As a membership-based platform, Cherub bridges the gap between angel investors actively looking for opportunities and founders ready to scale. Think of Cherub as a dating app for startups and investors, where both parties can connect, evaluate and build the perfect partnership. Notable investors on the platform include Morgan DeBaun, Angel Investor and Founder of Blavity & AfroTech, and Sophia Amoruso, GP at Trust Fund and Founder of Girlboss.
Found/LA
FOUND, an initiative from the Wurwand Foundation, was founded by Jane and Raymond Wurwand, creators of Dermalogica, to support local entrepreneurs in building their businesses, fulfilling their goals and uplifting their communities. Focused on bridging the funding gap for Main Street businesses, FOUND provides entrepreneurs – especially women, immigrants and BIPOC individuals – with access to capital, education and a supportive network of like-minded peers.
Originally launched as a pilot program in Los Angeles, FOUND/LA has since created a plan for similar initiatives to expand to cities across the country.
One of FOUND/LA’s primary goals is to help local entrepreneurs secure the capital they need to grow their businesses. “Women-owned businesses receive less than 4% of all available financing, whether from loans, family support, or venture capital. For women of color, that number is less than 1%, despite starting businesses with nine times more than any other group,” explains Jane Wurwand. FOUND/LA partners with nonprofit lenders to provide these entrepreneurs with affordable, reliable loans and the resources they need to succeeded.
Grants for Women
As for grants, the more you apply, the better your chances of success. It’s also a chance to build valuable relationships – if you don’t win at first, stay connected with the organizations and reapply. Remember, you have to be in it to win it! Below is a list of popular grant opportunities for women, but with some research, you’ll find countless options available.
The Amber Grant supports women entrepreneurs by awarding three monthly grants of $10,000 to women. In addition, it offers three annual grants of $25,000 to a select trio of winners selected from that year’s 36 monthly grantees.
- Cartier Women’s Initiative
The Cartier Women’s Initiative empowers women entrepreneurs who are driving change and creating a positive impact. This program provides funding, mentoring and networking opportunities to help women expand their businesses.
- Tory Burch Foundation
The Tory Burch Foundation Fellows Program selects up to 50 Fellows each year from across the US and its territories for a one-year fellowship. The program offers digital education, a $5,000 education grant, access to interest-free loans, networking opportunities and more.
The Women Founders Network’s Fast Pitch Competition awards $25,000 to the top tech/tech and consumer/CPG companies, with an additional $5,000 grant to a finalist selected by Junior Venture Capitalists.
Whether you’re in the ideation stage or preparing to scale your business, it’s essential to know that financing options are available. Researching these options and carefully evaluating how each will affect your personal and business finances is key to choosing the right path forward.