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MYSTERY BEHIND Lending to Women In her first appearance before the U.S. House of Representatives, the Administrator of the Small Business Administration (SBA), Maria Contreras-Sweet, recently said, “There is no silver bullet when it comes to access to capital.” This comes from a woman who left the California-based bank she founded to become Administrator. Her sentiments were brought into clear focus by another Californian, Congresswoman Janice Hahn, who cited bleak statistics when it comes to the status of women and access to capital: before the recession, women-owned small businesses received 40 percent of SBA loans; today, it is only 16 percent. The publication of the Senate Small Business Committee’s report on challenges facing women business owners, 21st Century Barriers to Women’s Entrepreneurship, has spurred the women’s business community into doing some soul-searching to try to get to the bottom of the mystery. Namely, why do women lag behind their male counterparts when it comes to obtaining capital for their businesses? The speculation comes in various forms: women don’t have the confidence to go ask for money/ investment, men lend to men not women, lending requirements stack the deck against lending to women-owned businesses since they tend to be smaller and newer than male-owned businesses; the list goes on.
By Ann Sullivan
The National Women’s Business Council, another voice for women nationwide, recently published a study about this topic.
Among its findings: Men tend to start businesses with twice as much capital as women, $135,000 vs. $75,000. The biggest difference in amount of capital between men and women was with regard to outside equity,
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| NAWRB MAGAZINE