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Women-Owned Small Businesses:

Women-Owned Small Businesses:. Does the Small Business Administration Fill a Capital Gap?. Brett Theodos. May 16, 2008. Small businesses employ a majority of workers. Source: County and Zip Business Patterns, 2005. Women underrepresented among small business owners. Women: Minorities:

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Women-Owned Small Businesses:

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  1. Women-Owned Small Businesses: Does the Small Business Administration Fill a Capital Gap? Brett Theodos May 16, 2008

  2. Small businesses employ a majority of workers Source: County and Zip Business Patterns, 2005

  3. Women underrepresented among small business owners Women: Minorities: Minority-women: Small businesses owned by: 16.0 % 9.9 % 3.5 % Source: 2003 Survey of Small Business Finances

  4. Women-owned small businesses historically lacked access to capital Small businesses that needed capital but didn’t apply fearing rejection: Women-owned: All others: 24.4 % 16.0 % Source: 2003 Survey of Small Business Finances

  5. SBA created to fill capital gaps: Does it? • Created in 1953 to fill capital gaps for credit-worthy small businesses unable to access credit elsewhere • Guaranties loans made by private lenders • 2 Programs of interest: 7(a) and 504 • FY 2007: 103,000 guaranteed loans worth $19.8 billion

  6. More loans go to women-owned small businesses under SBA SBA loans and conventional small business loans to women-owned firms Source: SBA Administrative data for 7(a) and 504 Programs, 2001-2004; Conventional lending from 2003 Survey of Small Business Finances

  7. Larger loans go to women-owned small businesses under SBA SBA loans and conventional small business loans to women-owned firms Source: SBA Administrative data for 7(a) and 504 Programs, 2001-2004; Conventional lending from 2003 Survey of Small Business Finances

  8. 56% 68% But many women-owned small businesses still face a capital gap Number of firms receiving SBA loans and facing capital gaps Source: SBA Administrative data for 7(a) and 504 Programs, 2001-2004; Capital gap firms from 2003 Survey of Small Business Finances

  9. Conclusions and policy implications • Women own small businesses, but at rates less than men • Access to financing is critical for business creation and growth • Many woman-owned small businesses receive capital on the private market, but capital gaps remain for women-owned firms

  10. Conclusions and Policy Implications cont’d • SBA has a role in ameliorating these capital gaps • SBA makes more and larger loans to women-owners than the private market • But there is still a large unmet demand for capital by credit-worthy women-owned small businesses • SBA and private lenders can do more to increase outreach to women-owned firms

  11. Resources • UI SBA evaluation reports • http://www.urban.org/projects/sba/ • Small Business Administration • Women’s Business Centers, Small Business Development Centers • http://www.sba.gov/ • Department of Labor • http://www.women-21.gov/ • Association of Women’s Business Centers • http://awbc.biz/default.asp • National Women’s Business Council • http://www.nwbc.gov/ • http://www.womenbiz.gov/ • National Association of Women Business Owners • http://www.nawbo.org/ • Center for Women’s Business Research • http://www.cfwbr.org/

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