How CDFIs Can Help Women-Owned Businesses
Women started 49% of new businesses in the United States in 2021, up from 28% in 20191. Despite this tremendous growth, the challenges women business owners face are real and significant. Women-owned businesses tend to be smaller, with fewer financial resources and may not meet traditional lending requirements.
As a recent article on forbes.com points out, “Women have less savings to bootstrap their businesses, their friends and family have less money to gift or invest, they’re less likely to own a home to use as collateral for a loan, and their networks are smaller, making referrals to funders less likely.”2
“There are systemic barriers that make access to capital harder for women entrepreneurs, especially those who are Black and Latina,” said Candace Waterman, president & CEO at Women Impacting Public Policy.
It is exactly these types of barriers that Community Development Financial Institutions (CDFIs) were created to help overcome.
CDFIs were established in 1994, with tremendous bipartisan support, to help address inequities in lending. CDFIs are mission-driven, rather than profit driven, meaning that they consider more than the traditional “5 C’s of Credit” usually required by typical financial institutions. CDFIs seek to invest in viable businesses owned by underserved populations, such as women or the BIPOC community.
Rising Tide works with local businesses who do not qualify for more traditional funding but are essential for making their communities thrive.
In addition to making funding accessible, many CDFIs like Rising Tide offer technical assistance – guidance in areas that can help their business succeed. Technical assistance may come in the form of business advising, budgeting and planning, and/or marketing support, usually at little to no-cost.
Rising Tide has been committed to working with women business owners since its inception in 2001. We have provided more than 175 individual women-owned businesses with loans and supported more than 200 women-owned businesses with technical assistance.
1 June 2022 Survey by Gusto, “Survey: Entrepreneurs Seizing New Business Opportunities Amid the Great Resignation”.
2 Jan 5, 2022, forbes.com by Geri Stengel, “How CDFIs Will Help Women Entrepreneurs Thrive Despite the Pandemic”.