Small Business Challenges for Women & How to Solve Them

When it comes to business, women are regularly breaking new ground. According to the US Small Business Administration (SBA), women-led businesses employed over 10 million workers and accumulated $1.8 trillion in receipts in 2019. 

Despite this number, women made up only 20% of employer firms. One of the biggest challenges women face is acquiring loans for their small businesses.

The Challenges Women Face

Obtaining Funding

A 2022 report by biz2credit shows a stark difference between men and women borrowers, with 29.2% of borrowers being by women-owned businesses compared to 70.8% being by men-owned businesses. It also shows an alarming gap between the average loan size, with loan applications for women-owned businesses being 33% lower than those of the opposite sex. 

Why do women face obstacles in getting proper funding? One of the reasons is systemic. It wasn’t until 1988 that women were permitted business loans without a male co-signer. And investor bias persists to this day. 

Another challenge is building credit. Pay inequity between men and women of all demographics is ongoing, making it that much harder for women to improve their credit scores. Recent findings show women’s earnings at 82% of men’s earnings, and the spread is even larger for women of color.

Lack of Support

Although a record number of women are running Global 500 businesses today, there is still a large gap between them and their male counterparts. In 2021, there were 23 women running Global 500 businesses, which only equals 4.6% of the total. In the US, women hold just 8.2% of the CEO spots.

According to the Labor Force Statistics Survey by the Bureau of Labor and Statistics (BLS), there is a drastically smaller amount of managerial positions held by women in 2021, particularly for women of color:

• White women: 32.6%
• Latinas: 4.3%
• Black women: 4.3%
• Asian women: 2.7%

Women were impacted much more than their male counterparts during the COVID pandemic, setting them back even further. With a lack of equity between men and women in high-level business and managerial positions, female entrepreneurs don’t have the same access to supportive mentors and guides like men do. Finding sponsors, networks and general supporters is even more difficult in male-dominated industries. 

Getting Noticed

Even though there are 12.3 million women-owned businesses in the US, females still face gender discrimination in the market. They often have to exceed the performance of their male counterparts to be taken seriously and get their business noticed. 

Qualities of entrepreneurs such as confidence, decision-making and authoritarianism are typically associated with men. When women exhibit these same traits, they are often viewed through a more critical lens, being labeled as bossy or pushy. These stereotypes make it harder for women to stand out and find buy-in for their businesses.

How Women Overcome Business Challenges 

There’s no doubt that women have found ways to raise above inequities and blaze new trails. Throughout the decades, female entrepreneurs have employed proven strategies to support their financing efforts, amplify their networking efforts and boost their business exposure. These tactics can work for you as well: 

How to Obtain Financing

• Have a concrete business plan: Lenders need to see that you have the ability to grow your business. Be prepared to show your progress thus far so they can see solid potential in your business.
• Have your information ready: When you meet with a lender, come prepared with information about you and your business. They’ll want to know what you need the loan for, the amount you need, and how you plan to pay off the loan.
• Have solid credit: Many lenders will use your credit score as a determining factor for loan eligibility. While some lenders work with people who have below-average credit scores, it helps to take time to improve your score. 
• Build relationships: Build relationships with bankers and lenders, but don’t stop there. Connect with other small businesses and entrepreneurs. Investigate angel investors and venture capitalists who support businesses in your community. Be open to the possibilities and know there’s more than one route to take.
• Tap your network: Ask friends, family, and your social circle to contribute to your funding goals. Crowdfunding is another method of obtaining financing.

How to Build Support

• Connect with SCORE: Access a network of volunteer business mentors by connecting with SCORE. Get advice on funding your business and connect with other small business owners at their free virtual events.
• Attend women in business events: Connecting with other women entrepreneurs can give you access to a powerful support network. Search for upcoming conferences that provide women networking opportunities and business tools to be successful. Women EmpowerX or She Leads host conferences that empower women with networking, business strategies and industry expertise. 

How to Boost Your Business Visibility

• Get help with digital marketing: If you have a personal relationship with someone in marketing, it never hurts to ask for advice. You can also tap digital marketing programs at universities. For instance, the digital marketing program at UW-Madison gives women and minority-owned businesses free marketing deliverables created by their students. 
• Collaborate with other women entrepreneurs: Connect with other women in business and strategize how to boost your brands together with online collaboration. You could feature each other’s social media, promote your blog posts or create content together. 

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Apply for Flexible Financing With Ascentium Capital

We value and support women-owned small businesses and understand the challenges you face. At Ascentium Capital, we are dedicated to helping you advance and develop your business with financing programs that offer fast approvals and flexible terms.

To learn more, fill out this quick form and contact us today.

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This article was originally published on the Ascentium Capital blog where you can find other helpful content.

* Financing dependent on credit parameters.