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The number of women-owned small businesses is certainly growing, but not at the rate it should be at this point in history. It is still much harder for a woman to start or grow a business than it is for a man, despite the fact that women start businesses five times faster than the average American small business. Of the 11.6 million female-owned businesses, only 2% earn more than $1 million in revenue.

A recent report from New Hampshire Senator Jeanne Shaheen highlights at least two widespread obstacles for women-owned businesses along with what needs to be done to overcome them. Both obstacles involve connecting with the right people. While these connections are becoming easier to foster, it’s worth noting that these are steps male business owners don’t even have to think about.


The importance of role models and mentors is often overlooked by people who were raised in environments that taught them they could pursue any field they desired and achieve success. They grew up hearing about people who were just like them living their dreams and were therefore convinced they could do the same. For many women, however, this was not the case. Imagine even conceiving the idea of pursuing a certain field if you didn’t know of a single person of your gender and/or ethnicity who found success in this industry. This is why one of the sections in Shaheen’s report discusses increasing the availability of positive role models and mentors for women.


A mentor’s primary responsibility is to educate the pupil about how to achieve the same level of success he or she is enjoying today. The advice will be both professional and personal, which means the mentor will bestow crucial knowledge about the industry in question as well as personal obstacles, like how to balance being a parent, spouse and business owner. A female business owner may have heard this information countless times before but hearing it from someone who, not too long ago, was in the exact same place she is in now, makes it infinitely more powerful. Your mentor is a real person, not some TV personality. Any obstacle in life becomes less threatening when you know someone else has conquered it with tools that are unquestionably within reach.

Mentors are also great for networking, which is essential for any business owner, male or female. Once you have established a relationship with a mentor, your list of valuable contacts will grow tremendously and likely include numerous professionals who have significant experience working with female business owners. The fact that your mentor is willing to recommend you as a business partner is extremely motivating because your mentor wouldn’t have done this if she didn’t believe you had the work ethic, reliability and intellect to do your job better than anyone else in your industry.

A lack of good connections may be partially to blame for the second item on Shaheen’s report:


Access to working capital between men and women is far from equal. Women receive just 2% of venture capital funds and reportedly have a much lower approval rating for small business loans than men for several reasons. Female-owned businesses are launched with less personal funding than male-owned businesses, which tells the bank that they have less money to use for paying off debt should the business fail. A near-perfect credit score might as well be mandatory for a bank loan but according to Forbes, women have an average credit score 20 points lower than men. Another factor is that women tend to work in industries that are unfairly stereotyped as “risky” or “low growth,” like hospitality or retail.


Female business owners who have been rejected by banks should consider alternative business financing companies, some of which offer special small business loans for women in addition to bad credit business loans for borrowers with poor or little credit history. These companies do not discriminate on industry, net worth, or the size of the applicant’s business. Several of their business funding programs are designed to help you raise your credit score with just a few months’ worth of payments, which don’t have to be the same kind of payments associated with bank loans. Since female-owned businesses often have less money to play around with, alternative business financing companies develop terms that make their small business loans for women easy to pay off. They might accept lower payments when operational funding is on the low side or alter payment frequency in the event of an unforeseen expense.


Aside from their high approval rating, much of the appeal for alternative business financing stems from the complete absence of a judgmental attitude usually observed in banks. Applicants are judged almost entirely by the performance of their businesses, and problems reserved for women-owned businesses will be met with not disinterest but deep sympathy. This is the way all clients are treated, as all problems that may be inhibiting growth are addressed before funding is distributed. Banks don’t need their borrowers to be successful in order to grow but companies like United Capital Source do, which is why they take every measure they can to ensure their clients’ success.

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