Women Business Owners May Face Loan Gender Gap…
Women who own small business are still behind their male counterparts when it comes to getting loans and government contracts, a recently released congressional report said.
The report by Democratic staffers of the Senate Small Business & Entrepreneurship Committee found that while women-owned businesses account for 30 percent of small companies, they receive only 4.4 percent of the total dollars in conventional small-business loans. That amounts to $1 for every $23 loaned.
In terms of numbers of loans, women-owned businesses receive only 16 percent of all conventional small-business loans, and 17 percent of loans backed by the Small Business Administration. Their loan applications are also more likely to be rejected more often than those from businesses owned by men, and the loans they get are likely to have more stringent terms.
According to the report, women are also falling short in receiving government contracts. Although Congress in 1994 set a government-wide goal of awarding 5 percent of federal contract dollars to small businesses owned by women, it hasn’t reached that goal. Failing to meet the goal costs women-owned businesses nearly $5.7 billion in government contracts each year.
The report also called for increased funding for Women’s Business Centers, SBA-sponsored counseling programs for women owners around the country. Reduced funding and staffing at the centers have lowered the number of women owners they are able to help.
Despite the challenges facing women owners, they are becoming a greater force in U.S. business, the report said. It noted that 4.6 percent of all U.S. companies were owned by women in 1972; in 2007, the latest year for which there is Census Bureau data available, they owned nearly 29 percent. Between 1997 and 2007, women-owned businesses added about 500,000 jobs, while the rest of privately held companies cut jobs.
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