U.S. markets open in 8 hours 54 minutes

Women Business Owners Lack Access to Peers, Capital

Tamara E. Holmes
Women Business Owners Lack Access to Peers, Capital

Women business owners are more likely to experience financial challenges than men in their field, a new survey suggests.

Wealth advisory firm Wilmington Trust teamed with C200, a women’s leadership organization, to survey business owners about their future prospects. It found that while neither men nor women are immune to potential obstacles, women reported being more likely to start from a disadvantage.

An unlevel playing field

When it comes to handling the day-to-day challenges of entrepreneurship, women don’t believe they have as much support as men do. In fact, 26% of women respondents said a lack of peer networks was a problem in growing their business. In comparison, only 14% of men who owned businesses felt the same way.

In addition, women aren’t seeing the same level of financial support as men are. Data from the New York and Kansas City Federal Reserves shows that about 47% of women-owned businesses that applied for business loans received them, compared with 61% of companies owned by men.

The Wilmington Trust and C200 survey found that, in comparison to men, women who founded their own companies were likely to receive a smaller percentage of what they asked for:

  • Women received, on average, 61% of the capital they sought
  • Men received, on average, 68%

While url="https://www.valuepenguin.com/small-business/best-small-business-loans-women" title="small business loans for women"small business loans for women/link] may help reduce the gender financing gap, many women entrepreneurs aren’t holding their breath. In fact, 16% of women entrepreneurs believe women will never receive the same access to capital as men — double the 8% of men entrepreneurs who believe the same.

A larger personal stake

In addition to having less access to capital, women business owners are less likely than men to use their own funds as startup capital:

  • 31% of women have used personal assets to support their businesses
  • 43% of men have done so

However, women who do invest their own money in their businesses tend to invest a bigger stake. According to the survey, women invest, on average, 45% of their personal funds in their business, while men, on average, invest 36% of their assets.

The survey found other gender differences that may impact how businesses are run and the level of control women have over their businesses. Half of women respondents said their spouse is involved in the business, while only 39% of men reported the same.

Women business owners may also be more prone to transferring the family business to their daughters. Of the businesses involving family members, 65% of those owners said they involve their sons, compared with the 43% who bring their daughters into the fold. Going further, 56% of women business owners involve their daughters, compared with 38% of men business owners.

Methodology: Between Feb. 21 and March 11, Wilmington Trust and C200 surveyed 1,009 business owners with companies that have revenue exceeding $5 million a year.