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As we move further into 2026, the landscape for women entrepreneurs continues to evolve, revealing both progress and ongoing challenges. Notably, recent discussions around workplace equality have highlighted the importance of supporting female business owners, especially in light of the significant economic contributions they make.
While issues like the gender pay gap and relocation trends often dominate headlines, the disparities in small business ownership deserve equal attention. In fact, the gender gap in entrepreneurship is estimated to cost the U.S. economy over $800 billion annually, underscoring the need for a more inclusive and equitable business environment.
At Zippia, we believe that achieving workplace equality is a collective responsibility, and as such, we have analyzed the states with the highest percentages of female business owners.
The West Coast: A Leader for Women Entrepreneurs
Once again, the West Coast emerges as the top region for women business owners, showcasing its progressive stance on gender equality. Meanwhile, the South appears less favorable for female entrepreneurs, with only one state, Florida, breaking into the top half of our rankings.
Our analysis utilizes data from the latest Survey of Business Owners (SBO) and census insights from the American Community Survey to pinpoint states where female entrepreneurship thrives.
Florida ranks #11, indicating a distinct regional divide influenced by various cultural and societal factors affecting women’s business ventures.
Self-Sufficiency Among Female Entrepreneurs
When it comes to funding their startups, both men and women predominantly rely on personal savings. However, the patterns reveal stark differences in funding sources, with men generally exploring a broader spectrum of options compared to their female counterparts.
Funding Sources for Startups
| Source Of Capital | Source For Women | Source For Men |
|---|---|---|
| Personal or family savings | 51.3% | 59.0% |
| Home equity loan | 2.1% | 3.0% |
| Personal or family assets | 4.5% | 5.8% |
| Personal credit card | 7.3% | 7.4% |
| Other source | 1.4% | 2.0% |
| None needed | 34.3% | 21.9% |
| Venture capital | 0.1% | 0.3% |
| Grants | 0.3% | 0.2% |
| Government backed loan from a bank | 0.4% | 0.6% |
| Loan from family and friends | 1.3% | 1.9% |
| Business loan from government | 0.1% | 0.2% |
| Business loan from a bank | 3.6% | 8.5% |
| Business credit card | 1.9% | 2.5% |
Interestingly, aside from the “none needed” category, men utilize every other funding method more frequently than women. For instance, only 3.6% of women secure bank loans as their fifth option, while men do so 8.5% of the time as their third choice.
Although women typically request $35,000 less than men on average, they still face significant barriers in securing funding:
- Women receive only 80% of the capital that men do when seeking funding.
- They account for just 16% of all conventional small business loans issued annually.
- Women are 5 percentage points less likely to obtain loans compared to male entrepreneurs.
For those seeking venture capital, the outlook is even bleaker, with less than 0.1% of women receiving such funding, while men secure it at more than three times that rate.
The Role of Small Business Administration (SBA) Loans
SBA loans aim to support small businesses owned and controlled by women, yet they still depend heavily on traditional lenders. The most common startup loan, 504 Loans, requires borrowers to contribute only 10% of the total cost, while the SBA backs 40% and lenders cover the remaining 50%. However, banks often exhibit discriminatory practices when it comes to lending to women entrepreneurs.
While the SBA and SBIC may believe they are addressing these disparities, studies indicate that gender-based differences in credit and revenue contribute significantly to the ongoing financing challenges faced by female entrepreneurs. These issues are exacerbated by the gender wage gap and societal biases, requiring a collective effort to foster change.
Top States for Female Business Owners
| State | Rank | Self-Employed Women Percentage |
|---|---|---|
| Montana | 1 | 9.87% |
| Idaho | 2 | 8.00% |
| Vermont | 3 | 7.98% |
| Oregon | 4 | 7.94% |
| California | 5 | 7.42% |
| Colorado | 6 | 7.34% |
| South Dakota | 7 | 7.30% |
| Wyoming | 8 | 7.17% |
| Maine | 9 | 7.02% |
| New Mexico | 10 | 6.94% |
| Florida | 11 | 6.89% |
| Alaska | 12 | 6.81% |
| Hawaii | 13 | 6.65% |
| Washington | 14 | 6.52% |
| North Dakota | 15 | 6.27% |
| Iowa | 16 | 6.16% |
| Oklahoma | 17 | 6.06% |
| New Hampshire | 18 | 5.92% |
| Nebraska | 19 | 5.79% |
| Minnesota | 20 | 5.75% |
| Kansas | 21 | 5.72% |
| Connecticut | 22 | 5.65% |
| New York | 23 | 5.65% |
| Texas | 24 | 5.29% |
| Utah | 25 | 5.24% |
| Massachusetts | 26 | 5.20% |
| North Carolina | 27 | 5.17% |
| Arizona | 28 | 5.17% |
| Georgia | 29 | 5.11% |
| Maryland | 30 | 5.02% |
| Louisiana | 31 | 4.99% |
| Rhode Island | 32 | 4.97% |
| Tennessee | 33 | 4.94% |
| Missouri | 34 | 4.94% |
| Illinois | 35 | 4.87% |
| Wisconsin | 36 | 4.87% |
| Virginia | 37 | 4.83% |
| New Jersey | 38 | 4.80% |
| Arkansas | 39 | 4.59% |
| Nevada | 40 | 4.57% |
| Indiana | 41 | 4.43% |
| Michigan | 42 | 4.43% |
| Ohio | 43 | 4.42% |
| Delaware | 44 | 4.35% |
| Kentucky | 45 | 4.21% |
| Alabama | 46 | 4.19% |
| South Carolina | 47 | 4.17% |
| Pennsylvania | 48 | 4.01% |
| Mississippi | 49 | 3.68% |
| West Virginia | 50 | 3.29% |
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Author
David Luther was the Content Marketing Editor for the Zippia Advice blog. He developed partnerships with external reporting agencies in addition to generating original research and reporting for the Zippia Career Advice blog. David obtained his BA from UNC Chapel Hill.
