Financing women entrepreneurs can help build economy
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.
Co-Chairs of the Women’s Enterprise Task Force Pam Alexander and Dr Glenda Stone said “We need to encourage more women who wish to start up and grow businesses to do so. Clearly targeted access to finance backed up with appropriate pre- and post-investment support is key if female entrepreneurs are to maximise their contribution to the economic upturn.”
The WETF calls on Government, financial institutions and enterprise agencies to work together to ensure that women have the support they need to achieve strategic growth through access to finance.
Notes to Editors:
- The Women’s Enterprise Task Force was established by Gordon Brown in 2006, in order to advocate for and increase the quantity, growth and success of women’s enterprise in the UK. Task Force members view women’s enterprise as one of a number of key enablers of economic recovery that requires tailored and continued support from both Government and the private sector. For further information, click here
- The Women’s Enterprise Task Force priorities include gender-disaggregated business data, women-friendly business support, access to finance and technology, supplier diversity in public and private sector procurement, and positive promotion of women-owned business issues in the media.
- The Women’s Enterprise Task Force’s Myths and Realities of Women’s Access to Finance report is based on data from the Global Entrepreneurship Monitor 2007, the UK Small and Medium Enterprise Finance Survey 2007, and the Challenges and Opportunities of Growth Survey 2008 (the latter conducted by Delta Economics). To download a copy, click here
- Women starting up in business will tend to provide a more immediate contribution to the economy as around two in five women come into self-employment from unemployment compared with around one in five for men.
- The ASPIRE co-investment fund was launched by Minister for Economic Competitiveness and Small Business, Baroness Shriti Vadera on Women’s Enterprise Day in November 2008. The fund is being managed by Capital for Enterprise. For further information, visit: http://www.capitalforenterprise.gov.uk/files/Aspire%20Fund.pdf
- At the recent Women in Business International Conference, the Rt. Hon. Lord Mandelson, Secretary of State for Business, Enterprise & Regulatory Reform, said that “boosting female entrepreneurship is essential to improving our productivity and competitiveness as an economy". For the full speech, see here: http://www.berr.gov.uk/aboutus/ministerialteam/Speeches/page51473.html
- Regional Development Agencies across the UK provide targeted help to women entrepreneurs and women thinking of starting up a company. Business Link, a business support service funded by the RDAs, and supported by government departments, agencies and local authorities, offers real and local help for businesses online, by phone and face-to-face. See www.businesslink.gov.uk
- During the past months, Real Help Now for Business and more recently Real Help Now for Women have demonstrated the Government’s commitment to helping businesses in the recession. In addition, a number of Regional Development Agencies have taken inspiration from the successful US Women’s Business Centre model, launching regional pilots providing tailored business support to help women entrepreneurs to start and/or sustain their businesses.
CONTACT:
For press enquiries, please contact Tanya Reed (tanyareed@seeda.co.uk; 01483 501362)
For WETF enquiries, please contact Elizabeth Heritage (elizabethheritage@seeda.co.uk; 01483 501 354)
For Aspire Fund enquiries, please contact Melanie Perkins (melanie.perkins@capitalforenterprise.gov.uk; 0114 206 2145)