By Amy Hereford, LiftFund CEO
In 1949, a visionary group of women in Kansas City came together to create the American Business Women’s Association, determined to support and promote growth opportunities for women across various professions. They set out to break barriers and advocate for equal rights and pay in the workplace, and on September 22, they celebrated the first American Business Women’s Day.
This holiday resonates with me deeply, both as a woman and as the CEO of LiftFund, because it closely reflects our mission. As one of the nation’s most established nonprofit small business microlenders, we do more than just provide small business owners with access to capital they might otherwise lack. We offer them the financial resources to grow and scale, while fostering meaningful connections through networking and business support. Our goal is to ensure no one is left behind or feels like they are navigating their entrepreneurial journey alone.
As a leading Community Development Financial Institution (CDFI) in Texas, we are deeply committed to tracking and analyzing impact data. We see firsthand how women-owned businesses have become a vital force, not only in our home state, but in the global economy – driving innovation, creating jobs, and strengthening the social fabric of our communities both locally and beyond.
Despite their significant contributions, women entrepreneurs continue to face ongoing challenges that hinder their growth and success. Recognizing both the impact of these businesses and the barriers they face is crucial to building a more inclusive and thriving economy.
The Economic and Social Contributions of Women-Owned Businesses
According to the National Association of Women Business Owners (NAWBO), more than 12 million businesses in the U.S. are owned by women and employ almost 9 million workers. Those businesses are generating $1.8 trillion in revenue, which means women-owned businesses are not only fueling economic growth but are also playing a crucial role in the communities they serve.
As a woman in the lending industry, I’ve seen first-hand the significant social impact women-owned businesses can make. Research from the Harvard Business Review shows that companies founded by women are more likely to prioritize sustainability, community engagement, and ethical business practices. These values are reflected in how women-owned businesses often reinvest profits into their local communities, support charitable causes, and create jobs that emphasize work-life balance and fair wages.
Women entrepreneurs are also often at the forefront of innovation. A report from the Global Entrepreneurship Monitor highlights that women-led businesses are more likely to introduce new products and services, particularly in underserved markets. This focus on innovation not only drives economic progress, but also addresses gaps in access to essential services, making women-owned businesses crucial players in creating equitable and resilient economies.
The Challenges Women Face
Access to capital remains a significant challenge for women entrepreneurs. Despite owning nearly 40% of all businesses in the U.S., data from the Small Business Administration (SBA) shows that women receive only 16% of traditional small business loans. Moreover, some sources indicate that when women do secure funding, their loan amounts are typically 33% less than those granted to men.
Moreover, women-led startups receive only 2% of venture capital funding. A study by Babson College found that women are more likely to face gender-biased questioning and skepticism from investors. These disparities hinder the ability of women-owned businesses to scale, invest in growth, and compete in the larger market, restricting their potential to drive economic impact.
Access to capital is vital for long-term success and sustainability. Capital allows entrepreneurs to invest in essential areas such as equipment, inventory, marketing, and hiring employees. It also helps them manage cash flow, especially during challenging periods. Without adequate funding, small businesses may struggle to compete, innovate, and scale their operations. Additionally, having access to capital enables businesses to seize new opportunities, whether that means expanding into new markets or developing new products.
LiftFund exists to provide access to capital for those who do not have sufficient access through traditional lending sources. In Texas alone, LiftFund has distributed more than $76 million in loans to women-owned businesses since its inception 30 years ago, creating more than $1 billion of economic impact into local economies across the state.
Overcoming Barriers and Supporting Women-Owned Businesses
To unlock the full potential of women in business, we must tackle the systemic barriers that constrain their growth. Beyond the financial barriers, many female entrepreneurs struggle to balance their business aspirations with household and family responsibilities, which still often fall disproportionately on them. This imbalance is a major factor contributing to burnout.
Improving access to capital is a critical first step to help these business owners overcome the barriers they encounter. As one of the leading CDFIs in our nation, we proudly recognize the value of women-led enterprises and strive to offer more equitable funding opportunities. By expanding access to venture capital, grants, and loans tailored for women entrepreneurs, we can help bridge the financial gap.
By connecting women business owners with mentors, investors, and peers, we provide them with the guidance and resources essential for navigating the challenges of entrepreneurship.
What else can we do?
Women-owned businesses are essential drivers of economic growth, innovation, and social change. Their impact extends far beyond the financial success of their enterprises, shaping the communities they serve and impacting the broader economy.
Consumers and communities play a vital role in supporting women-owned businesses. Let’s look for the women-led enterprises in your community and support organizations that work to boost these incredible entrepreneurs past the barriers that prevent them from climbing. Since those women leaders first gathered in Kansas City in 1949, there have been so many chips and cracks in the glass ceiling. Today, on American Business Women’s Day, let’s look for ways to make one more crack – because it may be the one that finally shatters it.
