Difficulty in obtaining loans disproportionately affects female startup owners, question raises.
In the cutthroat world of entrepreneurship, female founders face an uphill battle when it comes to getting their hands on the green. According to Swoop Funding's recent report, male-led businesses have a whopping 12 times more business debt than female-led companies in the UK. But why are women getting the cold shoulder when it comes to financial backing? Let's dive into the factors that keep women's pockets light, and ways to level the playing field.
Why are Men Ahead of the Game?
Andrea Reynolds, CEO of Swoop Funding, revealed that a significant factor contributing to the gap is that men tend to ask for funding earlier in the process than their female counterparts. She also mentioned that a lack of awareness and targeted marketing from lenders towards female founders, combined with societal discomfort with debt, can further hinder women's access to financial aid.
Close the Accessibility Gap
To boost access to business debt, reaching out to female-focused investment firms and angel investors is a solid starting point. In the UK, organizations registered with the UK Investing in Women Code can provide valuable support. Networking and mentorship groups like the Female Founders Rise group could also prove invaluable in unlocking funding opportunities and offering financial wisdom.
Leverage Government Grants and Business Accelerators
Government grants and business accelerators are other resources that women founders should take advantage of. The Prince's Trust Women Entrepreneurs Programme and the Women in Innovation Awards are just a few examples of the grants available for female entrepreneurs in the UK. Business accelerators like the National Women's Enterprise Week, the Women in Tech Network, and the Invest in Women Hub can also help set the stage for success.
Utilize Debt Responsibly
Once women entrepreneurs have secured the necessary funding, managing it wisely is crucial for the long-term success of their ventures. Establishing a solid financial plan with clear budgeting and revenue forecasting, smart investment choices, and maintaining a healthy credit score are the keys to riding the debt wave rather than being drowned by it.
The financial playing field for female entrepreneurs is far from level, but with a blend of education, awareness, targeted support, and policy reforms, we can encourage more investment in women-led businesses and make the industry a more inclusive space for all.
Dig Deeper:
- How do you grow a unicorn? What Europe can do to support its startups[Where in Europe are women most willing to start their own business?]
- The impact of financial inclusion on economic growth and poverty reduction[4]
- The role of angel investors in startup funding[5]
Related Terms:- entrepreneurship- Financial aid- Women- Investment- Business
[1] PitchBook Data, Inc., "Equity Investment in Female-Founded Startups By Stage"[2] Cherie Blair Foundation for Women, "Financial Services - Overcoming the Barriers for Women Entrepreneurs"[3] World Bank Group, "Digital Financial Services for the Poor: A Review of 12 Initiatives"[4] McKinsey & Company, "Women entrepreneurs: Bridging the gap in financial services"[5] Forbes Women, "11 Startup Grants For Women Entrepreneurs"
- The reluctance of female founders to ask for funding earlier in the process, combined with a lack of targeted marketing and societal discomfort with debt, are significant factors contributing to the funding gap for women in entrepreneurship.
- To close the accessibility gap for women in securing business funding, reaching out to female-focused investment firms, angel investors, and networking with organizations registered with the UK Investing in Women Code can provide valuable support.
- Government grants, such as the Prince's Trust Women Entrepreneurs Programme and business accelerators, like the National Women's Enterprise Week, the Women in Tech Network, and the Invest in Women Hub, can help jumpstart women-led businesses and set them on a path to success.
