The number of female entrepreneurs is reaching unprecedented levels and showing no signs of slowing down, as younger generations avoid relying on businesses for lifelong employment and immigrants, by nature risk-takers, start their own businesses.
To mark Women’s Equality Day, which commemorates the 101st anniversary of the 19th Amendment granting women the right to vote, the SBA hosted an online ‘fireside chat’ featuring the SBA administrator Isabella Casillas Guzman on August 26.
The SBA administrator described her agency’s resources for enabling women small business owners to survive and thrive amid the COVID-19 pandemic, including the SBA Women’s Business Center Network of 136 centers located across the country. The mission of these centers is to empower women entrepreneurs through advocacy, awareness raising, education and support. Through management and technical assistance, entrepreneurs – especially economically or socially disadvantaged women – receive comprehensive training and advice on a wide range of topics in many languages to help them start up and grow. their own business.
“The main streets are defined by small businesses,” said Guzman, whose father owned several veterinary hospitals. “I think it was a very educational experience for me – seeing how hard he worked, balancing all the roles he had to play as the owner of this small business.”
Guzman believes investing in companies when faced with resistance yields solid results and says the SBA needs to close the gap in opportunity.
“This is why I am motivated to help ensure that SBA is up to the challenge and to help support the changing face of entrepreneurship,” said Guzman, who understands that the COVID-19 pandemic has had a significant impact on women-owned businesses and entrepreneurs in the past. marginalized and rural communities.
“Over the past six months, we have revamped and launched new COVID relief programs,” she said, noting seven new programs and six adjustments the SBA has launched to provide emergency assistance. “(Funding) is still needed by millions of small businesses, especially small businesses owned by women. We want to make sure that we are reaching out to the smallest of little ones and women and people of color and veterans and others in rural and low income areas that have been historically underserved.
The SBA administrator pointed out that the agency was able to provide assistance to more than 11 million small businesses. The funding included $ 28.6 billion for the Restaurant Revitalization Fund, which prioritized women and veterans, socially and economically disadvantaged business owners. The government also launched a $ 16.2 billion Shuttered Venue Operators Grant (SVOG) program that has helped more than 10,000 theaters, museums and other important economic anchors in communities across the country. Guzman was also proud of the fact that 96% of PPP loans went to small businesses with 20 or fewer employees.
“We are committed to delivering billions more and doing the overhaul and outreach necessary to ensure fair distribution,” she said. “This is the essence of the SBA. “
“I want to look at all of our programs to make sure we meet small businesses where they are, instead of waiting for them to come to us,” Guzman added. “For women in particular, this means expanding our existing network of 136 women’s business centers, especially in our rural areas, historically marginalized communities.
“I am proud that we have opened five women’s businesses on HBCU campuses,” said Guzman. “We go beyond our established networks to reach out to small businesses that don’t know they can ask us for help. That’s what we learned during the pandemic: to make sure they could connect to capital to grow and just connect to networks for advice on an ongoing basis. “
What is the next frontier for a woman entrepreneur? Growth.
About 90% of women-owned businesses are sole proprietorships, small women-owned businesses start up small and too often stay small because they lack access to the capital they need to grow.
Earlier this year, the annual Biz2Credit study of women-owned businesses found that although the incomes of women-owned businesses fell in 2020, their revenues increased, mainly because spending fell during the pandemic. . Incomes of women-owned businesses were on average $ 330,226 higher than in 2019. However, the total was $ 421,928 lower than the average for male-owned businesses ($ 716,842) in 2020.
In 2020, the effects of the pandemic have been particularly noticeable for women-owned businesses, many of which have historically been less well funded than male-owned businesses. The SBA administrator is not surprised by this fact.
“It’s no secret that the venture capital world is still largely male dominated. A recent article in Harvard business review finds that the disparity between men and women and venture capital has worsened during the pandemic, ”said Guzman. “Only 2.3% of funding went to women-led startups in 2020; we have to reverse that. Women represent 12% of decision-makers in venture capital firms. We need to do more to bring women to the table and make sure we invest in our women entrepreneurs.
Weaker financial indicators among women business owners are indicative of a lack of service and attention provided by traditional financial institutions. This creates a gap in financial opportunities between women who run their own businesses compared to men. COVID-19 has highlighted this trend by exacerbating a long-standing gender corporate financing gap.
The average amount funded for women-owned businesses ($ 39,731) was 36% lower than for male-owned businesses ($ 61,958) in 2020. After careful analysis, business-related factors including lower FICO scores, younger company age, and higher operating expenses played a bigger role in this gap, rather than just gender. But there is still a gender gap, and many of the SBA’s efforts are aimed at closing the lending gap between male and female-owned businesses.