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Why Is It Challenging for Women Entrepreneurs to Get Business Funding?

Women Entrepreneur
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Women entrepreneurs, and women-owned businesses, face several gender-based challenges that their male-run counterparts do not.

This is largely a function of systemic discrimination and disenfranchisement that remains in the business marketplace.

Fortunately, small business funding companies have been taking this far more seriously than traditional lenders and banks. As such, special attention has been given to make funding equally available to women and women-owned businesses.

Some Surprising Statistics

Only 16% of the business loans that are originated in any given year in the US are for women-owned businesses. 

This is despite the fact that more than double that number, 36%, of all US businesses are women-owned and operated. This disparity is further exacerbated than women, on average, are approved for only around 80% of the funding that men are.

Statistics

This has been shown time and time again in studies where the core financials were the same, but differently-gendered owners were used to measure the difference in funding granted.

The net result is that women and women-owned businesses have a much greater difficulty in accessing small business funding than their male counterparts.

It’s also one of the key reasons why companies like BizFly Funding offer women entrepreneurs loans, and small business loans for women, and loans for women-owned businesses. 

This is not done out of an intention to segregate or separate women and women-owned businesses from others, but rather is a concerted effort to provide equitable and fair access to small business funding for this traditionally underserved demographic.

Reasons Women and Women-Owned Businesses Are Disadvantaged

There are three primary reasons (aside from gender) why women entrepreneurs and women-owned businesses tend to be at a disadvantage when it comes to obtaining small business funding. 

While some of these reasons are no doubt a legacy of discrimination and speak to the disparities in the business world today, they are worth understanding in their own right. A lot of lending in general is based on statistics, trends, and actuarial tables.

The facts presented in the three primary reasons below often come into play in lending decisions, and are at least partly responsible for the disparities in approval rates and amounts of business loans for women.

Both as individuals and as businesses, the typical female credit score is lower than that of a male. 

At the same time, only around 20% of male-led businesses’ credit scores fall below the 620 point threshold, while close to 33% of female-led businesses’ credit scores meet that same criteria. 

For small business funding purposes, the average credit score of a male-run small business is 645, and a female-run 629.

The figure is around 30% – a greater disparity in revenue than even in salaries and pay, which stand around 20-23% in the business world as a whole.

As a result, the time in business criteria that many small business funding companies take into consideration as part of the approval process is harder, statistically, for women to meet than men.

How Small Business Loans for Women Can Help

Fortunately, a lot of these disadvantages can be turned into advantages, by pursuing small business loans for women. These loans ensure equal access to small business capital, with women entrepreneur loans and credit products that don’t discriminate based on gender.

The fundamentals of the business are considered, and the requirements are generally fairly minimal compared to traditional business loans. 

Help small business loan for women

This means that many of the specific disadvantages mentioned above – regardless of their origins – can be overcome, with lower credit score requirements, lower revenue requirements, and lower time in business requirements for loans for women-owned businesses than general business loans.

Fortunately, a lot of these disadvantages can be turned into advantages, by pursuing small business loans for women. These loans ensure equal access to small business capital, with women entrepreneur loans and credit products that don’t discriminate based on gender.

The fundamentals of the business are considered, and the requirements are generally fairly minimal compared to traditional business loans. 

This means that many of the specific disadvantages mentioned above – regardless of their origins – can be overcome, with lower credit score requirements, lower revenue requirements, and lower time in business requirements for loans for women-owned businesses than general business loans.

Loans for Women-Owned Businesses from BizFly Funding

If you are part of a woman-owned or women-owned or operated small business, and in need of small business funding, we encourage you to apply for a business loan for women at BizFly Funding. 

The application process is easy, and approvals are often granted in as little as a few hours after applying. Funds can be available within as little as 1 business day.

BizFly Funding is committed to helping right the wrongs of the past in the lending industry, by offering loans for women-owned businesses up to as much as $1,000,000 in size.

The basic qualifications for a women’s entrepreneur loan at BizFly Funding include:

So long as these requirements are met, women entrepreneurs and small business leaders can access business loans for women from BizFly Funding with competitive rates, variable loan terms, and exceptional customer service, all with very little effort, paperwork, or waiting for approvals.

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