Boss Lady

Why is it so hard for women to find small business funding?

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Entrepreneurship and small businesses have always been purported to be the lifeblood of our economy. But a recent Washington Post report showed that entrepreneurship is on the decline and dipped more than 30 percent since the Great Recession.  New business creation is down, so that means the economy isn’t roaring back as intensely as we think. The most troubling part about this trend, though, is that it will hurt women who are looking to become entrepreneurs the most.

Thirty percent of all small business are run by women, and in 2014, those businesses were responsible for over $1.4 trillion in sales. That’s reason enough to support more women who want to open small businesses based on the potential for monetary return.

But women are still being left behind when it comes to their desire to open small businesses. They aren’t given the same opportunities as men and do not fit the traditional profile of a small business owner, which is that of a man. So with an almost inherent bias working against them when asking for funding when trying to start a business, it is a little clearer as to why the number of entrepreneurs who are women is so low.

In addition to the roadblock bias, women are also fighting against a club of men who generally like to hire their own. Basically, if a venture capitalist is going to invest in a startup business, he or she is more likely to sink that money into an idea linked to a person her or she is already connected to. If most current entrepreneurs are men, then it makes sense that they inherently will give their money to other men. Because Silicon Valley and other tech/business hubs aren’t necessarily crawling with women, most opportunities for funding will stay with those who are connected to the the men who have the assets and capital for funding: other men.

Not being a part of the exclusive club of men who hold the key to giving more access to women who want to be entrepreneurs is one thing but having to fight against sexism and gender bias is a tiring edifice of supremacy.

Finding a Solution

Statistics and research tell us that women make less than men for the same work, are treated worse in the workplace, and still have to deal with a level of patriarchy that is basically derived from women being viewed as less than. So what can be done to fix these flaws in the U.S. economy?

Designing programs and grants that are geared specifically for women is a start. The federal government via the Small Business Administration does some great work here – but it’s up to lenders and venture capitalists to buy into what these programs offer. Sites like Businesswomanmedia.com also shows women how to navigate in and around and area that’s not designed for them, and empower them to build strong businesses.
Other fantastic resource for women looking to start a business are platforms likeFundera; a site that matches you with loan providers that are right for the type of business you may be looking to start. There are other non-traditional ways to find funding – from crowdsourcing to asking friends and family – and women still have to fight a little harder to land that startup cash (for now).  Despite the roadblocks and tough paths to travel, there is always a way forward for women to find what they need to become entrepreneurs.

About Megan Totka

Megan Totka is the Chief Editor for ChamberofCommerce.com. ChamberofCommerce.com helps small businesses grow their business on the web and facilitates connectivity between local businesses and more than 7,000 Chambers of Commerce worldwide. She specializes on the topic of small business tips and resources and business news. Megan has several years of experience on the topics of small business marketing, copywriting, SEO, online conversions and social media. Megan spends much of her time establishing new relationships for ChamberofCommerce.com, publishing weekly newsletters educating small business on the importance of web presence, and contributing to a number of publications on the web.

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