A new extensive study has shown that women business owners are now attempting to obtain bank credit for their firms with increased frequency. They are also receiving credit in greater amounts, and using it continually for business expansion. However, women still find more obstacles in obtaining credit than do men.
The study was conducted over a six-year period by the National Foundation for Women Business Owners (NFWBO), and was sponsored by Wells Fargo.
“Since NFWBO’s previous survey on business owners’ sources and uses of capital just two years ago, the share of women-owned firms that sought financing increased from 27% to 33% and the share with bank credit increased from 46% to 52%,” said Lois E. Haber, CLU, ChFC, NFWBO Chair and President & CEO of Delaware Valley Financial Services, Inc. “However, women entrepreneurs have lower levels of bank credit than their male counterparts and women business owners of color are less likely than Caucasian women business owners to have credit.”
Women-owned firms have been increasing at twice the overall business growth rate in the United States. “Overall, women-owned businesses are maturing so they look more like the profile of all businesses,” said Colleen Anderson, Executive Vice President of Wells Fargo Bank. “They have increased their use of earnings from their businesses, credit cards, bank loans and funds from personal savings to finance their enterprises.”
“The study also documents that women business owners whose firms are beyond the start-up phase are increasingly aware of the need for capital to advance their enterprises,” Haber explained. “Women who have owned their businesses for five to nine years are less likely than owners of either younger or older firms to report that they have enough capital for their businesses’ growth and development. Likewise, women business owners in the five- to nine-year range are most likely to see access to capital as a more important business concern.”
Only 29 percent of women business owners of color reported having bank credit in the survey, while 53 percent of Caucasian women business owners responded that they did.