Senator Targets The Gender Gap In Small Business Lending
Written by Tim Morral
Chairwoman of the Senate Committee on Small Business & Entrepreneurship, Senator Maria Cantwell, pushes legislation to improve access to loans and government contracts for women-owned businesses.
Reliable access to capital is a prerequisite for small business success. But while getting a small business loan can be challenging for any small business owner, it can be especially difficult for female entrepreneurs--many of which face an uphill battle when it comes to receiving small business financing from banks.
According to the Seattle Times, 30 percent of small businesses are owned by women. However, Senate reports show that last year, female entrepreneurs only receive 4.4 percent of loan dollars, highlighting the gender gap that currently exists in the nation's small business financing system.
Recently, Senator Maria Cantwell, Chairwoman of the Senate Committee on Small Business & Entrepreneurship, introduced legislation to level the playing field. Called the Women's Small Business Ownership Act, the bill seeks to make it easier for women-owned businesses to secure financing by tailoring lending products to the needs and challenges of female entrepreneurs.
"We see (lending) issues with minorities the same way we've seen them with women. We want to make sure they're getting access to the right help and support," Cantwell told the Associated Press.
Cantwell believes that women-owned companies face several unique challenges in today's lending market. Male lenders are sometimes hesitant to finance women-owned businesses because they may not fully understand their products. Additionally, women-owned businesses tend to be interested in microfinancing and intermediate financing (loans for $200,000 or less)--loan products that fall outside of SBA or traditional financing structures.
Also, last year women-owned small businesses received just 4.3 percent of federal contracts. The deficit in federal contracts awarded to women-owned businesses is particularly troubling given the fact that 20 years ago, Congress established a 5 percent federal contracting goal for women-owned businesses--a benchmark that the federal government has never met.
Cantwell's legislation will seek to provide more opportunities for women-owned businesses to secure government contracts and improve female entrepreneurs' ability to take advantage of exporting opportunities, which Cantwell sees as the best avenue for economic growth and new job creation.
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