Women business owners face gender gap, report says

Women who own small business are still far behind their male counterparts when it comes to getting loans and government contracts, a congressional report said today.
The report by Democratic staffers of the Senate Small Business & Entrepreneurship Committee found that while businesses owned by women account for 30 per cent of small companies, they receive only 4.4 per cent of the total dollars in conventional small-business loans. That amounts to USD 1 for every USD 23 loaned.
In terms of numbers of loans, businesses owned by women receive only 16 per cent of all conventional small-business loans, and 17 per cent of loans backed by the Small Business Administration.

Their loan applications are more likely to be rejected than those from businesses owned by men, and the loans they get are likely to have more stringent terms.
Women also receive only 7 percent of venture-capital funding. "The numbers are jarring, for sure, and we need to own up to the fact that we want to see more women entrepreneurs, and to make sure they're getting access to capital," Committee Chair Maria Cantwell, D-Wash., told The Associated Press.
Women are also falling short in receiving government contracts. Although Congress in 1994 set a governmentwide goal of awarding 5 percent of federal contract dollars to small businesses owned by women, it hasn't met that goal.

The closest it has come is 4 percent, in the fiscal year that ended Sept. 30, 2012, the report said. Failing to meet the goal costs women-owned businesses nearly $5.7 billion in government contracts each year, it said.

Congress needs to take steps to help women-owned businesses, including making changes to the SBA's microloan program aimed at helping companies borrow up to USD 50,000, the report said. It also called for the reauthorization of what's known as the Intermediary Lending Program, which allows business owners to borrow between USD 50,000 and USD 200,000.
Cantwell noted that women-owned small businesses may not need more traditional, and larger, SBA loans. That increases the importance of the smaller loan programs.

The report also called for the Securities and Exchange Commission to complete regulations to allow small businesses to crowdfund, or solicit investor money from the public through online portals.
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 has lowered the number of women owners they are able to help.