ACCESS TO CAPITAL form. The platform lists 11 action items that federal policymakers could take to improve the flow of capital to women-owned firms. What drove the focus on this issue? It was a staggering statistic that women receive only 4 percent of commercial loans. Four percent? How is that possible? WIPP devoted time to researching the landscape of business finance, capital access and small business lending, and discovered women have a long way to go. In 2013, more than two in three loan applications for women-owned firms were denied. WIPP’s annual membership survey regularly finds that women must make multiple attempts to secure bank loans or lines of credit, with a full 40 percent never succeeding. All this despite the fact that women make up one-third of business owners, generate more than $1 trillion annually in receipts, and grow at 1.5 times the rate of average businesses. The platform WIPP released this summer will hopefully change that. The solutions span three main themes: changing the capital infrastructure, supporting small lending institutions, and strengthening government investment. The platform has four solutions that will change the capital infrastructure. For example, WIPP wants the government lending programs to consider FICO’s alternative credit scoring system. This system modernizes the way credit is calculated to provide new opportunities for women entrepreneurs trying to obtain loans. WIPP also wants to support small lending institutions by pushing for an end to a “one-size-fits-all” approach to regulation. Removing these burdens on small banks will allow them to return their focus to lending. Changes to government policies are also an important part of the platform. WIPP believes a small business seat at the Securities & Exchange Commission (SEC) will ensure that smaller women-owned firms have an advocate as the next generation of alternative lending, like CrowdFunding, is eventually put into place. Modernizing the Microloan Program, where women are the majority of loan recipients, will also make a difference. Women continue to start businesses at an explosive rate, but they will never get off the ground if they cannot obtain early stage
capital. In addition to summer policy platforms and victories, recently released data demonstrates the long-term effectiveness of entrepreneurial advocacy efforts. The 2012 Survey of Business Owners (SBO), released in August, shows impressive expansion for women-owned businesses. The SBO is an important tool for assessing the state and growth of businesses, particularly ones that are women-owned. This survey “provides the only source of detailed and comprehensive data on the status, nature, and scope of women-, minority-, and veteran-owned businesses.” While only the preliminary findings have been released, many expect the full data set will reveal many more successes. This growth in women-owned firms is an encouraging economic indicator. Just as important, this progress occurred during the largest recession since the Great Depression. It stands as a testament to the resilience and entrepreneurial spirit of our country’s women business owners. It’s been a busy summer for politics and policy. Women entrepreneurs have quietly made important strides toward accessing the capital they need. Data bears out the incredible power women entrepreneurs possess to shape and grow the economy. Our advocacy rarely makes national headlines, but for the nearly 10 million women business owners out there, a seat at the policy table makes all the difference in the world. Before you turn all of your attention to the political noise of a Presidential election, take the time to look for policy changes that affect your business. You will find them in organizations such as NAWRB, SBA, WIPP, AEO and AWBC. The House and Senate small business committees report on actions important to small businesses. Important decisions impacting all entrepreneurs take place all the time, you just have to know where to look. Ann Sullivan , President, Madison Services Group, Inc. www.madisonservicesgroup.com
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