EEDA - East of England Development Agency

Financing women entrepreneurs can help build economy

5 August 2009

A recent report commissioned by the national Women’s Enterprise Task Force (WETF) dispels the myth that female businesses owners are charged more than men for loans by banks.

The report found that women tend to be better at repayment than their male counterparts and that their businesses are often seen by banks as lower risk.
  
The WETF’s Myths and Realities of Women’s Access to Finance report finds that women succeed at or above the rates of men when seeking bank finance, which is a major encouragement to women thinking of starting up in business in this challenging climate.  It also finds that women are less likely than men to have been rejected due to poor business planning, and are less likely to have been unable to make a repayment on loans, suggesting that women can be better at managing their business finances.  

However, women are less likely than men to have the knowledge and confidence to access venture capital and equity funding, which can be productive sources of growth finance.  To address this issue, the WETF inspired the creation of the Aspire Fund, a co-investment fund that targets high-growth women-owned businesses. The fund has made its first investment and is considering further ventures.
  
Women constitute more than half of the population and 46% of the British labour market.  However, they are less than half as likely as men to start a business, and make up only 28% of the self-employed.  Even with this under-representation, it is estimated that women’s enterprise contributes £130 billion turnover and £70 billion GVA each year to the British economy.  If British women were to reach the enterprise levels of their US counterparts, there would be an estimated 900,000 more start-ups and £23 billion more GVA each year. 

Supporting women through better access to more diverse sources of finance (for start-up and growth) could give the UK economy the boost it needs.

Women’s business support: East of England

Supported by the East of England Development Agency (EEDA), Enterprising Women is a dynamic networking community providing comprehensive business support and specialist information to over 5,500 women entrepreneurs. It recently secured over £1 million from EEDA to continue supporting businesswomen in starting-up and growing their businesses in the region. It offers online promotional opportunities, networking events, mentoring and ambassador schemes, subsidised training programmes and a wealth of business support and information resources.

Bev Hurley, programme director of Enterprising Women and EEDA board member, said:

"Enterprising Women runs a woman-specific access to finance programme which increases both the confidence and the chances of women accessing the right finance which is appropriate for their business, whether debt or equity.  In our experience working with women across the UK, and in contrast to the findings of the Task Force report, it isn't so much that women lack the confidence to apply for the latter, but typically the nature of their businesses, and/or their growth ambitions, means that equity finance is not appropriate for many women.  We're working to increase and support growth ambitions so that more women seek and are successful in obtaining venture capital."

Visit www.enterprising-women.org to find out more and join the network.

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