A recent report highlights the financial challenges female entrepreneurs face, especially in scaling their businesses.
- 39% of female small business owners cite poor access to finance as a barrier to growth.
- Many women rely on personal funds, with 13% resorting to credit cards due to external funding challenges.
- Ethnic minority female founders experience significant gaps in financial accessibility.
- A call for supportive initiatives and mentoring to empower female entrepreneurs is emphasized.
The financial landscape for female entrepreneurs remains challenging as highlighted in a recent survey by Small Business Britain in collaboration with Square and Clearpay. Nearly two-fifths, or 39%, of female small business owners indicate that poor access to finance is a significant barrier to scaling their businesses. This is compounded by the fact that a substantial number, nearly 60%, do not seek external financial support at all, relying instead on personal savings, while 13% even resort to using credit cards to sustain their business ventures. This dynamic underscores a systemic issue of significant reliance on personal resources.
The problem of financial accessibility is even more pronounced among ethnic minority female founders, with 88% having used their own funds to start their businesses. These entrepreneurs frequently encounter finance as both scarce and often perceived as not a viable option, amplifying the barriers to entry and growth in the business world. Such challenges were personally expressed by Janan Leo, who shared her experiences of financial restraint citing, “Money was incredibly tight and there were days when I sacrificed lunch.”
Furthermore, the survey reveals that the primary motivation for women starting businesses is the pursuit of greater independence, with this cited by 60% of the participants. However, a knowledge gap exists, as nearly half of these women admit to lacking understanding about equity investment and display apprehension about investor partnerships. This reflects a need for educational initiatives focused on financial literacy and investment acumen, designed to embolden female entrepreneurs.
The report advocates for several early-stage interventions aimed at enhancing gender equity in entrepreneurship. These include the creation of more accessible funding opportunities, tailored financial skills training programs, and the provision of mentoring and advisory services. According to Samina Hussain-Letch, these measures are crucial as “female entrepreneurs often encounter unique hurdles on their journey to success,” yet they persist with resilience and determination. The envisaged support structures are intended to unlock potential, foster business growth, and significantly contribute to the wider economy.
The report underscores the urgent need for systemic change to support female founders in accessing financial resources and achieving entrepreneurial success.
