For as far as we’ve come in the gender equality movement, we’ve still got a ways to go. Nothing reveals the progress needed quite like the obstacles still faced by our nation’s female entrepreneurs. A daunting report by Democratic staffers of the Senate Small Business & Entrepreneurship Committee reveals what many of us feared to be true: women business owners are struggling to have access to the same opportunities as male entrepreneurs, especially when it comes to credit.
With women owning 30% of small businesses, they are only receiving 4.4% of total dollars in conventional small business loans made. Overall, they are receiving 16% of the conventional loans made and 17% of SBA-backed loans. So, not only are they struggling to get funded, but when they are approved, they’re receiving significantly smaller sums than their male counterparts.
The small business committee had a hearing on Wednesday, July 23rd, to address the barriers currently faced by women business owners, including the very problem expressed in the stats above. The hearing included SBA Administrator Maria Contreras-Sweet, entrepreneur Barbara Corcoran and more.
During the hearing, women’s struggle in attaining relevant business training and counseling was discussed, along with their challenges accessing federal contracts, and most importantly, the clear disadvantage they have when looking for capital. Given Fundera’s mission to help small businesses get access to the capital they deserve, we had to ask:
Beyond the numbers noted above, it’s also important to note that women are receiving only 7% of venture funds, a bleak number considering the rise in entrepreneurship in VC-saturated locations like New York City and Silicon Valley.
Looking at these numbers can be discouraging, but that is not a response that’s going to help us change this ratio. We’ve got to take action to put male and female business owners on equal footing. It’s imperative that we also recognize this isn’t just an issue of gender equality. In fact, women-owned businesses are absolutely critical to the current economy. The report discloses that “growth of women-owned firms outpaces that of all other firm types; women-owned businesses added roughly 500,000 jobs between 1997 and 2007, while the rest of privately held firms lost jobs.” Women entrepreneurs are helping drive job growth, so we need to make sure we, in turn, fuel their growth with small business loans for women.
The committee proposed the following solutions:
Given the truth depth of the issue, we wanted to add additional steps that, as a community, we can take to increase women’s access to capital:
The hearing on Wednesday offered a real opportunity for those of us who are responsible for supporting small businesses. We need to start thinking about other ways we can open up women entrepreneur’s access to capital and work to put these “ideas” into action, ensuring that when we revisit these numbers a year from now, the number of successfully-funded women entrepreneurs rises.
Are you inspired by these numbers? If so, how do you think we can work together to remove these barriers for women business owners?
Read the “21st Century Barriers to Women’s Entrepreneurship” here or check out our post on where to find small business loans for women.