United Capital Source is proud to be directly involved in the global movement to eliminate gender discrimination. Up until the rise of alternative business financing, the lending industry was notorious for its bias against women. If you’ve ever wondered why you don’t know many female business owners, it’s probably because women have a much, much harder time accessing working capital than men. Banks and other traditional lenders perceived women as riskier borrowers. They based their decisions on history, and female-owned businesses were not traditionally as successful as their male counterparts.
But this mentality would eventually lead to a massive wave of unjustified discrimination from business lenders. Small business loans for women with the exact same backgrounds and qualifications as men were rejected. Only recently has this wave begun to falter.
1. Accept The Reality Of The Situation
The first step in ending discrimination against women in business financing is accepting the reality of the situation. Odds are, a female business owner has more in common with a minority business owner than the average white, male business owner. Being a minority is naturally attached with numerous challenges that stand in the way of obtaining business funding. For example, minorities tend to run smaller businesses because they have a lower net worth. Their credit history is more likely to be poor, and they aren’t known to be involved in the most financially-rewarding industries.
Traditional business lenders might only associate these challenges with ethnic minorities. They forget that regardless of race, simply being a minority deprives you of crucial requirements for bank loans. If women were not a minority, they would start their businesses with the same amount of funding as men. They would have similar credit history, and there wouldn’t be such thing as a “male-dominated” industry. But this is not the case, and more business lenders need to realize that.
2. Women Are Not Alone In Their Financial Struggles
Women and minorities are not the only business owners who struggle to qualify for small business loans. Countless hard-working and responsible male business owners get rejected by banks. And much like women and minorities, the reason for rejection doesn’t always make sense. In fact, banks reject so many people that companies like United Capital Source were able to build business funding programs around their mutual circumstances. Some were rejected because their credit score wasn’t completely flawless. Others were rejected for being part of “low-growth” industries” or not having enough money in the bank.
It’s safe to say that female business owners would feel a lot less alone if they knew how many men faced the exact same misfortunes. Many male clients of United Capital Source have very limited personal funding. They can’t just lay out their own cash to finance an upcoming project or cover expenses during a rough patch. The fixed, monthly payments of traditional business loans don’t work for them. But they are able to pay off debt thanks to terms that accommodate their unique needs. We take pride in showing clients that their limitations aren’t as restrictive as their banks made them think.
3. Prove The Value Of A Real Business Partnership
While United Capital Source is not the only company to offer special small business loans for women, it may take time for more women to apply for business funding. This is partially because many female business owners likely aren’t accustomed to long-term relationships with business lenders. Women reportedly receive just 2% of all venture capital funds and seem to be more likely to start their businesses with no help from investors or a wealthy partner of some kind. A top priority of United Capital Source is showing new and current clients the value of a genuine business relationship and ultimately proving that we are worthy of their trust.
Nearly every client of UCS will agree that working with us has re-defined their perception of the business lending industry. We get to know each client on a personal level, rather than judging their potential by what’s on paper. In our experience, you can’t effectively solve a problem if you don’t understand the very nature of it. Some problems are purely the result of being a female business owner. So, we’re not just going to give you more money. We’re going to make it easier for you to run your business in general, even after you’ve made your last payment.