Times are changing as women entrepreneurs are turning to business finance in increasing numbers.
Business finance has traditionally been male-dominated and women entrepreneurs have been forced to fund their companies through drive, self-finance, and creativity. But things are changing.
Due to changes in technology and society, more and more women are now turning to business finance to help their companies grow. Below I explain why.
Recommended reading: Online Lending A Life Saver For Many In Society
Background: Women have traditionally been “discouraged borrowers”
In the past, women entrepreneurs have often chosen a different financial path to their male counterparts. Where men have sought out traditional business finance to develop their businesses, women have used their own resources or turned to new forms of finance like crowdfunding. This is partly due to the fact that historically women have been “discouraged borrowers.”
Women entrepreneurs have had to face tougher barriers to getting business finance than men. They’ve been subject to harsher scrutiny from loan officers and have been charged higher interest rates than men for business finance.
That’s not the only area of business finance which has been male-dominated. Venture capitalist (VC) lending has been run by men and prioritized investment in male entrepreneurs:
- 89% of VC investors are male
- Businesses owned by women receive 7% of VC investment.
However, the 21st century has seen a shift in business attitudes. Women are now more likely to seek business finance and lending institutions are more likely to give them the money they want.
There are a number of key reasons for this…
More female-owned businesses and women entrepreneurs
The number of women entrepreneurs has increased enormously in the last decade. Since 2007 there has been a 68% growth in the number of female-owned businesses, in comparison to an overall growth of 47% for the total number of new businesses.
This is partly because female business owners can operate their company much more independently. The development of AI means that a lot of the menial tasks can now be farmed out to external bodies for minimum investment. It means that women are feeling more confident in their ability to run and grow their businesses.
Another major reasons is that it’s become faster, simpler, and less time-consuming to manage a business. Ecommerce and tech are some of the major industries to have benefited from the growth in female-owned businesses – named she-preneurs. The increased emphasis on the benefits of entrepreneurship as a lifestyle that’s both flexible and rewarding has given more and more women the confidence to ‘jump in.’
Women are having a positive impact on ecommerce
Women entrepreneurs are thriving in ecommerce. The web-based selling has literally thousands of brilliant and innovative female-led products flooding the online markets: from period underwear to innovative sleep tech.
The excellent video below shows Charli, a web and graphic designer, and Sandra, a female entrepreneur discussing how they run their own successful ecommerce businesses…
Charli and Sandra are just two of the many female entrepreneurs with an ecommerce business. It’s become an industry of choice for a huge number of digitally savvy women. Ecommerce gives women the opportunity to generate long-term income, or create an asset that they can build and sell at great profit (as you can see from these private listings in LA). For more female ecommerce success stories, watch the brilliant video underneath…
But it’s not just changes in technology which means there are more female entrepreneurs. Society is becoming more inclusive and the barriers faced by women looking for business finance are being pulled down.
Society is changing, financial barriers are being attacked
Alongside the #MeToo movement, there have been a number of initiatives put into practice to help women gain economic empowerment. Some of the steps taken include:
- Gender lens financing: This puts emphasis on projects that will benefit women. This includes creating female entrepreneurs and giving women of all ages access to the capital they need to start their own businesses
- ILAW program: Inclusive Lending for Aspiring Women Entrepreneurs exists specifically to make it easier for women to get access to business finance, providing financial support and advice
- VC firms now back women: There has been a growth in VC firms that invest in women entrepreneurs and female-owned businesses. Among these are firms such as the Female Founders Club, which is centered on businesses in the areas of ecommerce, web products and services, and online marketplaces
Women need business finance for same reasons as men
As access changes, and it becomes easier for women to get access to VC funding and business lending, it’s important to remember that women entrepreneurs need finance for the same reasons as male business owners.
- Support: Female entrepreneurs need investment to solidify their business models
- Growth: Women need help to take their brands to the next level
Technology and society are removing barriers in business. Women entrepreneurs no longer need to rely solely on their ingenuity, savings, and drive to get the business finance they need. This shift in attitudes has led to improved terms for finance.
What terms can women get business finance under?
One of the best places for women entrepreneurs to turn is an online lender set up to provide businesses with the investment they need. Zip Capital Group is one such example and it has worked with companies from a variety of industries, including:
- Retail businesses
- Real estate management services
Getting funding using an online lender is flexible, hassle free, and requires minimal investment. It’s no surprise that more women entrepreneurs are turning to business finance….
There are significantly more women entrepreneurs now than there were a decade ago. Developments in technology have made it easier to run a business and changes in societal attitudes have made it easier for women to fund a business.
If you a woman with a great brand, you no longer have to go it alone. Nothing is holding you back from managing your business to even greater success!
Patrick Foster is a writer and ecommerce expert from Ecommerce Tips — an industry-leading ecommerce blog dedicated to sharing business insights from the sector, along with tips to help entrepreneurs take the next step in the development of their business. Check out the latest news on Twitter @myecommercetips.