Magazine article American Banker

Don't Overlook Women-Owned Businesses

Magazine article American Banker

Don't Overlook Women-Owned Businesses

Article excerpt

Byline: Claudia Viek

This year marks the 30th anniversary of the Women's Business Ownership Act, the legislation that allowed women to sign their own loan documents without a male relative co-signing.

The law was a major breakthrough -- a symbol of women's independence from economic patriarchy. It promised more success for women entrepreneurs.

For example, in 1987, Essie, an unmarried woman in her early 30s and owner of a successful corporate training business, was turned down by 13 banks as she sought growth capital to meet demand for her services. She was forced to "play bank" and took loans from friends and colleagues at 25% interest. It took enormous persistence and bookkeeping, but she pulled it off, operating for another 28 years, creating many jobs and becoming a local business leader.

The good news is that, 30 years later, there are now 11.7 million women-owned businesses across the country, accounting for nearly a third of all businesses. In 2016, these women-owned businesses created 9 million jobs and earned $1.7 trillion in sales.

Now for the bad news: Women-owned businesses get only 4% of commercial loans and only 18% of loans guaranteed by the Small Business Administration. We know that women need coaching and small amounts of capital in order to grow, but the source of this support, the SBA's Office of Women Owned Business, gets just $17 million in funding per year, even though the office's women's business centers served 145,000 women last year.

Women entrepreneurs are the sleeping goddesses of our economy. …

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