By: Wendy Doyle, President & CEO at United WE
In business, relationships matter. This is the case for any organization, including small businesses, but the magnitude cannot be understated for women business owners. The impact of relationships is so vital, the creation of a small business hinging on a banking institution loaning money to get the business off the ground.
Women business owners face this type of barrier every day. We know this – because at United WE, we talk to them – but more importantly, we listen.
Recently, a woman entrepreneur told our organization she was turned down by 22 banks and finally received a loan from bank number 23. Only two of the bankers explained why she was declined, with one citing the need for a husband to support the business, and another suggesting she allow the bank to manage her money and that she should get a traditional job.
Over the past couple years, we’ve held town hall meetings across Kansas and Missouri as an opportunity for women and allies to share their experiences. We constantly hear from women that limited business resources, damaging cultural norms and networks have negatively impacted their business endeavors.
The findings are published as research reports in our United WE Institute with next step recommendations to address the barriers women are experiencing.
Access to Capital for Women Entrepreneurs
We learned women lack fruitful relationships with banking institutions – indicating that relationships are most commonly transactional in nature. From our town hall research, 66% of Kansas women describe the relationship with their financial institution as transactional vs. 34% who categorize it as relational.
This lack of relationships with banking institutions affects women’s ability to access capital when forming businesses and limits their awareness of important financial information and resources to grow and sustain businesses.
One town hall participant from Garden City, Kansas said, “…I got laughed at when I tried to get capital from financial institutions for my business, so I had to open several credit cards.”
Another participant in Wichita, Kansas said, “…the banks don’t take women business owners seriously.”
In Missouri, more than 60% of women surveyed were interested in starting a business. Yet, women from the town halls talked about receiving very little to no support from others when starting businesses and access to affordable benefits being a barrier to getting started.
A Roundtable Revealed More Barriers
To further expand on what we heard in our town halls, we partnered with the Center for American Entrepreneurship on a roundtable with women entrepreneurs to dive deeper into understanding the barriers they face. The session focused on many issues like mentoring, peer support, and the issue of inequitable treatment by banks.
The session revealed many issues, including challenges with women-owned businesses in male-dominated industries, the desire for male and female mentors to launch and scale business, lack of access to capital (especially from large banks), and a desire to provide great benefits and professional development without absorbent costs. Read here for a report that further details the learnings, insights and next steps from the roundtable event.
Change Must Happen Now
Small businesses are the engine to our economy, and we must support women business owners. According to the McKinsey Global Institute, Kansas and Missouri’s economies stand to grow by 10-15% by 2025 if women’s participation in the labor force is boosted.
On average, women business owners believe they will achieve equal access to capital by 2031. That’s not soon enough. Change will not come far enough or fast enough unless we intentionally focus on creating opportunities for prospective business owners, particularly those underrepresented in entrepreneurship today.
We will never achieve true economic prosperity in this country without women. As the daughter and granddaughter of small business women, I feel it is a privilege and my responsibility to lead an organization that works to empower even more women to achieve their dreams.
At United WE, we are taking action and will continue to be a leading voice in our region by removing barriers for women and advocating for policies that support women’s economic development.
After all, our economy depends on it.