Women entrepreneurs are shaping the future of small business but still face obstacles when it comes to funding.
Women-owned firms have grown by 45 percent between 2007 and 2016—a rate five times faster than the national average, according to a 2017 report from the U.S. Senate Committee on Small Business & Entrepreneurship. But one of the key challenges for women-owned businesses is the difficulties associated with getting access to capital.
What’s driving so many women to open small businesses?
So what exactly is the driving force behind the surge of women-owned businesses? The 2016-2017 Global Entrepreneurship Monitor (GEM) Women’s Report found that women are 20 percent more likely than men to open a business based on necessity. Yet opportunity is also an important driver for women entrepreneurs, who are 5 percent more likely than men to start an innovative business.
It’s also revealing to look at the motivations of the diverse group of women entrepreneurs profiled in the Senate committee’s report. One said, “I’ve always wanted to work for myself,” while another acknowledged, “It was born of necessity. My family was going through a hard time financially and I needed to do my part to make money quickly.”
Another woman entrepreneur explained she was motivated because the business she helped build was sold to an owner who destroyed it. “I needed my own business to control my destiny!” she added.
Whatever your reason for opening a business, it’s clear that women are adept at identifying unfilled opportunities, building on personal experiences, and knowing they could be successful where others had failed.
Finding funding is the top challenge
While the growth of women-owned businesses is impressive, most surveys indicate that funding remains the No. 1 challenge for all small businesses, whether owned by women or men. That’s especially the case for women, with the Senate report stating, “Women entrepreneurs are unable to access their fair share of financial capital, diminishing their chances for growth.” Even though it might seem like an uphill battle, there are good loan options for women-owned businesses.