Women are reshaping the business landscape, emerging as a powerful force across industries. As entrepreneurs, executives, and decision-makers, they are driving innovation, fostering diversity, and unlocking new opportunities for growth. Yet, despite these advancements, women—especially women of colour—often encounter significant barriers in accessing the capital and resources needed to launch and scale their businesses.
The Role of CDFIs in Supporting Women Entrepreneurs
This is where Community Development Financial Institutions (CDFIs) come into play. These mission-driven organisations provide essential financial support to underserved communities, particularly focusing on women entrepreneurs who struggle to secure traditional funding.
A Growing Presence in Business
In 2019, women owned 42% of all U.S. businesses, a figure that continues to rise annually. According to the 2024 Impact of Women-Owned Business Report by Wells Fargo, the number of women business owners has grown at nearly double the rate of male-owned businesses between 2019 and 2023. Notably, Black women are the fastest-growing group of entrepreneurs, starting businesses at a rate 4.5 times the national average. However, the challenge remains: access to capital is a persistent issue.
The Funding Gap
A report by the Federal Reserve reveals that 60% of Black women entrepreneurs face funding gaps that hinder their business growth. This underscores the critical importance of CDFIs, which are designed to lend in areas where traditional banks often hesitate, ensuring that women entrepreneurs from underserved communities can access the capital they desperately need.
Inspiring Examples of CDFIs in Action
One standout example is Denkyem Co-op, a Black-led CDFI based in Washington state. This social purpose corporation provides direct funding to Black-owned businesses looking to expand their capacity. Denkyem has been instrumental in supporting women entrepreneurs like Monika Mathews, founder of QueenCare, a brand that creates handcrafted skincare products using natural ingredients.
QueenCare’s Impact
Mathews not only runs a thriving business but also supports youth programming in Seattle through her Life Enrichment Group. With Denkyem’s investment and business development support, Mathews has expanded her business while amplifying her community impact. Denkyem also supports a diverse range of women-owned businesses, including mental health therapy practices, doula services, and youth-enrichment organisations.
Freedom Equity Inc.: Another Beacon of Support
Another exemplary CDFI is Freedom Equity Inc., which is also led by Black women and has a staff entirely composed of Black women. They understand the unique challenges women face in entrepreneurship. About 43% of their borrowers are women-owned businesses seeking loans and business development assistance.
One of their clients, The Water Ice Holdings LLC, operates The Water Ice Shoppe and Marlow’s Cheesesteaks. With Freedom Equity’s help, they’ve expanded from a single location and food truck to four locations, significantly growing their wholesale and catering operations.
Supporting Nonprofits and Community Initiatives
Another noteworthy client of Freedom Equity is the Nutter Center for Empowering Women Inc. (NCEW). This local nonprofit focuses on self-sufficiency programs for adults and youth. NCEW faced cash flow challenges due to issues with Medicaid payments, but Freedom Equity provided a term loan that stabilised their operations and positioned them for larger investments from traditional financial institutions.
Celebrating Women Entrepreneurs
In recognition of National Women’s Small Business Month, it’s essential to honour the incredible contributions of women entrepreneurs to our economy and communities. We can all play a role in uplifting and supporting women-owned businesses. Here are some ways you can contribute:
- Mentorship: Offer your expertise to women entrepreneurs.
- Collaboration: Partner with women-owned businesses on projects or initiatives.
- Awareness: Spread the word about women-led ventures through social media or community events.
Making a Difference Together
Whether through direct support or simply sharing their stories, our collective efforts can make a meaningful impact. Women entrepreneurs are not just changing their own lives; they are transforming communities and economies.
Conclusion: The Future is Female
Women entrepreneurs are truly trailblazers redefining business success. Their resilience and innovation are reshaping the future of entrepreneurship. By supporting CDFIs and championing women-owned businesses, we can all contribute to a more equitable and thriving economic landscape.
Together, let’s celebrate and support these incredible women who are driving progress and making a difference in our world.
