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Report: Access to capital eludes many women business owners

Report: Access to capital eludes many women business owners


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The National Women’s Business Council recently released the first of four reports to better understand literature conducted on women’s entrepreneurship and capital.

The report, titled “Understanding the Landscape: Access to Capital for Women Entrepreneurs,” illustrates the areas of future focus and gaps in literature for researchers. The report was released this March honoring Women’s History Month.

The report finds that while women-owned businesses are making significant contributions to the economy, they remain hindered for growth by challenges in obtaining capital.

Key findings

Some key findings include societal perceptions such as an unconscious association that women in business have less credibility and lack legitimacy, or that female venture capitalists demonstrate a bias toward male business owners, suggesting that more female investors wouldn’t close the gender gap.

Women’s networks, compared with men’s, have fewer viable economic resources; additionally, these networks have fewer relationships with financial capital—of those that have relationships, they are less beneficial than those in a men’s network.

When compared with men, women business owners raise smaller amounts of capital and tend to be more dependent on personal sources of financing. External financing is more likely avoided by women, as it can lead them to releasing control or taking high levels of risk.

Local resources

OneKC for Women, an alliance among the Women’s Employment Network, Women’s Business Center (WBC), Women’s Capital Connection and WE-Lend, provides resources and opportunities for women looking to achieve personal, professional or financial self-sufficiency.

Brande Stitt, program manager at WBC, said the challenges facing female entrepreneurs in Kansas City include low credit scores because of a divorce or other life event.

“In our experience, women often ask for less money than they actually need and end up undercapitalized. Women also tend to be less confident in approaching lenders because it may typically be the role of their spouse or parent who has applied for personal loans in the past,” said Stitt.

With women-owned businesses accounting for slightly over one-third of the privately held businesses in the United States, the need for further research and support is apparent.

In Kansas City, OneKC members are pushing a variety of initiatives, including free counseling, via the WBC, for women seeking funding for their business and providing microloans to women who are not yet bankable. Women’s Capital Connection provides equity funding to women-led companies (one of only 20 groups in the U.S. offering such a service). The Women’s Employment Network promotes credit health with one-on-one financial coaching through their Financial Opportunity Center.

“Credit health is critical to securing debt funding for a business,” said Stitt.

Learn more or read the full report at www.nwbc.gov.

Katy Ibsen

Written by

Katy Ibsen is a freelance writer and editor who enjoys the opportunity to share others' stories. Investing over 11 years in magazine publishing, she has a keen appreciation for the creation of original content and print products. www.katyibsen.com

Categories: News Updates

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