The Hidden Costs of Self-Funding for Phoenix Women Entrepreneurs

For many Phoenix women entrepreneurs, launching a business often means dipping into personal savings, maxing out credit cards, or even tapping into retirement funds.

This approach, known as self-funding, offers complete control but carries significant hidden costs: increased stress, personal financial risk, and potential missed growth opportunities.

Take Megan Greenwood, founder of Greenwood Brewing on Roosevelt Row.

Starting with a modest five-gallon home-brew kit, she channeled her passion and went on to raise $68,000 through Kickstarter to fund Greenwood Brewery — now set to open on Roosevelt Row this year.

Her journey underscores a common challenge: the burden of self-financing when traditional banks or investors are hesitant to provide support.

In Arizona, women-owned businesses constitute nearly 46% of all firms.

Yet, a significant portion still relies on personal funds rather than institutional lending.

For Latina entrepreneurs, the gap is even more pronounced—35% cite poor credit as their primary barrier to funding, compared to 19% of white women.

This reliance on personal financing leads to increased debt and stunted growth, as entrepreneurs struggle to keep their businesses afloat.

Fortunately, Phoenix offers alternatives.

Organizations like Prestamos Women’s Business Center and Growth Partners Arizona provide mission-driven lending solutions.

Unlike traditional banks, these Community Development Financial Institutions (CDFIs) consider the full story behind each applicant, not just credit scores.

They offer loans ranging from $5,000 to $150,000, coupled with coaching, mentorship, and technical assistance.

This support enables women to launch and grow their businesses without depleting personal resources.

As advisors at Prestamos emphasize, "We see beyond numbers.

We invest in people, persistence, and community impact."

While self-funding demonstrates determination, it shouldn't be the default strategy.

Phoenix women entrepreneurs deserve access to fair capital that fuels growth without jeopardizing personal financial stability.

Initiatives like the Visible Sisters Initiative aim to highlight available resources, share success stories, and ensure women know they have viable options right here in the Valley.