A consistant theme throughout our research and convenings is that women still lack access to the means of capital they need to launch and grow their businesses. While we work to remove the barriers women face in accessing traditional sources of capital, it’s important to recognize that the marketplace is responding to the challenges that women have faced in accessing capital and new and alternative forms of funding have emerged.


New firms, especially women-owned and women-led firms, are inventing products that enable women entrepreneurs to get the capital they need to start and grow their businesses. Traditional lenders are also changing the way they do business so that they are finding new ways to lend to women business owners that may have been overlooked in the past.

What are these innovative and new platforms? There are five main categories of alternative lending:

Peer-to-Peer Lending

Lending Club, Prosper, Funding Circle, and Fundation are using a peer-to-peer (P2P) model. Backed by individual investors, these companies make loan decisions based on proprietary credit models and typically target mid-prime or near-prime borrowers. Interest rates range from 8 to 24 percent for loans of up to $250,000 that can stretch for three years. P2P platforms offer amortizing loans with fixed interest rates and three to five year maturities.

Women-Focused Investment Firms

Golden Seeds is an early stage investment firm with a focus on women leaders. Since 2005, they’ve invested over $70 million in more than 65 women-led companies. Astia is a great program too and recently joined the Council. They offer investors unmatched access to high-potential deal flow and unmatched visibility in the capital provider community for women entrepreneurs. Astia is transforming the way businesses are funded in the here and now, providing capital, connections, and guidance that fuel the growth of highly innovative, women-led ventures around the globe. Inspired and driven by a clear vision of an ecosystem in which both women and men innovators are fully celebrated and underpinned, Astia is a powerful resource dedicated to the success of women high-growth entrepreneurs, their teams, and their ventures—and a champion for inclusive innovation worldwide. Phenomenelle Angels Fund I, LP is an early stage fund that invests in women and minority owned or managed businesses in Wisconsin and the Midwest. They invest in exceptional management teams that exploit proprietary technology to create breakthrough applications in the following market sectors: Information Technology, BioTechnology/Life Sciences, Clean Technology, Consumer Goods/Services and Communications.


Crowdfunding is democratizing the capital challenge for women. Crowdfunding has been all the buzz lately and it’s exactly what it sounds like, generating funds through a crowd of people giving donations at a range of amounts. It’s often goal driven and has proven to be very successful in generating funds for WOBs. Rewards-based crowdfunding platforms, such as Kickstarter or Indiegogo, are great opportunities for women. Indiegogo has reported that 42% of its crowdfunding campaigns are run by women and women raise more than men both in terms of the number of contributions and amount of money. Plum Alley is crowdfunding for women by women. Founded by Deborah Jackson, the company focuses on spurring innovation and job creation among female entrepreneurs. It can help them find money to get started (through a six-step plan to tap potential donors in their social networks) and help them find customers (through an online shopping site).

Equity crowdfunding platforms – like AngelList, Early Shares, Fundable, CircleUp, Crowdfunder, WeFunder.com, Equity Net, and RockThePost are an emerging market. Only available to accredited investors now, we hope that the SEC will define the rules for equity crowdfunding that will open this market even more! Equity crowdfunding can fill the gap for those of us who don’t have any 5-percenters in our immediate circle. No matter the gender of the founding team, success rates of companies raising money through equity crowdfunding are similar: 23% for all companies, 24% for women-led companies, and 23% for women-owned companies, according to Crowdnetic’s database. However, on some platforms women entrepreneurs are more successful than their male counterparts. “As of 2014, women-led businesses closed their rounds successfully at a 21% higher rate than men on the platform,” said Ryan Caldbeck, founder and CEO of CircleU

Lenders with New Scoring Methodology

Kabbage, Inc. is an online financing technology and data company based in Atlanta, Georgia that lends money to small businesses and consumers. The company simplified the lengthy, manual loan application process to one that is 100% online and automated. Businesses and consumers can use their own data to submit an application online and receive an immediate answer. Services like Square has a NEW Cash Advance Program. The mobile payment company reportedly is testing a new initiative to loan money to its customers. Reportedly, they offer merchant cash advances, lending its customers capital in return for a fraction of future sales plus a fixed cost. Finally, OnDeck claims to be able to approve a loan in minutes using 2,000-plus data points per online application that focuses on the health of your business – not your personal credit score. OnDeck has loaned more than $1 billion since 2007. They went public in December, having raised $200 million.

Hybrid Models

Able: They are the world’s first collaborative lender, based in Austin, TX. They help small businesses get credit from their friends, family, and fans. Able offers business owners one- to three-year loans of $25,000 to $250,000 at 8 to 16 percent interest—but with a twist: Borrowers must raise the first 25 percent of the sum from friends and family.


While this rise of new and alternative modes of capital are important to know about – there are also some traditional avenues of revenue for women that can be very effective. Specifically, microloans are a popular financing tool as they decrease the significant debt burden and also allow a woman to maintain ownership, as opposed to equity financing.

The Basics:

  • In the United States, microcredit has generally been defined as loans of less than $50,000 to people who cannot, for various reasons, borrow from a bank.
  • Most microloans are provided via community-based, nonprofit organizations and are designed to help low to moderate-income people who live in rural or disadvantaged communities.
  • According to a study done by ACCION, one of the largest microfinance institutions in the U.S., there are an estimated 13.1 million micro-entrepreneurs in the U.S., including 2.4 million African-Americans and Hispanics, most of whom have never received a business loan and are unable to meet traditional loan qualifications.
  • Terms and interest rates can vary, but in general, microloans have shorter payment terms, competitive interest rates, and are accessible to borrowers who have little to no collateral or poor credit.
  • Most nonprofit microlenders include services like financial literacy training and business plan consultations, which contribute to the expense of providing such loans but also, those groups say, to the success of their borrowers.

Why is it important for women?

  • This size of loan appeals to women because they don’t want to face a significant debt burden as they try to build their business.
  • Women entrepreneurs have historically been underserved by lending institutions, so these programs are stepping in with both capital and technical assistance, enabling stronger performance by these women’s businesses by increasing their available capital and business acumen.

Here are four microloan programs aimed at helping women entrepreneurs:

  • ACCION International, a global nonprofit organization that supports microfinance institutions to provide financial services to low-income clients, servicing more than five million people totaling more than $9 billion in microloans. Accion helped build 63 microfinance institutions in 32 countries on four continents. Today, Accion works with an active network of 28 microfinance institutions in North America, Latin America and the Caribbean, Africa, and Asia. Headquartered in Boston, Accion also has offices in Washington, D.C. and a USA Network.
  • Grameen America is dedicated to helping women who live in poverty build small businesses to create better lives for their families. The organization offers microloans, training and support. Since opening in January 2008, Grameen America has disbursed over $109 million in microloans to over 19,000 women. Started in Jackson Heights, Queens, Grameen America has expanded within New York City and to Indianapolis, Omaha, San Francisco Bay Area, Charlotte, and Los Angeles.
  • Kiva, a non-profit organization and online peer-to-peer lending platform. Kiva allows people to lend money—as little as $25—via the Internet to low-income, underserved entrepreneurs in over 70 countries. Since 2005, Kiva has crowd-funded more than one million loans, totaling more than a half a billion dollars, at a repayment rate of 99%.
  • Opportunity Fund, a micro financing organization that serves mainly women below the poverty line in the Bay Area. The Opportunity Fund has lent more than $18 million directly to small businesses since its founding in 1995, stimulating more than $22 million in additional economic activity each year. The Opportunity Fund also provides ”micro savings accounts” for small businesses.

There is also the SBA Microloan Program, which is the single largest source of funding for microfinance institutions in the U.S., provides direct funding to qualified community finance organizations, who then issue the loans to borrowers.  Currently, the SBA loan limit is $50,000 with a maximum term limit of 6 years and interest rates ranging from 8 to 13 percent. SBA microloans can be used for several types of business financing, but cannot be used to cover debt or purchase real estate.  Small business owners who are interested in applying for an SBA Microloan must apply through an SBA-approved, participating microlender.