Building on an Oct 2010 report by the SME Financing Data Initiative, Globe & Mail reporter Marjo Johne examines the issues of gender discrimination towards female entrepreneurs seeking business financing.
From the article:
- "...in 2007, 85 per cent of female-owned small businesses that applied for a loan were approved. By comparison, the approval rate for male-owned small businesses was 96 per cent."
- "Female-owned businesses also got less money, receiving an average amount of $118,000, compared with $284,000 for the companies owned by men."
- "...female entrepreneurs had to provide lenders with more documentation – such as personal financial statements, appraisals of assets and cash flow projections – than male entrepreneurs..."
Why the discrepancy? The article, citing several financial industry leaders, suggests that the reasons may not stem from any specific gender preference on the part of lenders, but more from the nature of female borrowing requirements:
- "The SME Financing Data Initiative report points to poor credit history among some female business owners."
- "...female business owners tend to be younger than male ones, and have less experience managing or owning a company."
- "Women may also be behind men in the funding department because they’re less likely to go looking for money from external sources..."
In the highly-competitive banking environment that exists in Canada, there is little tolerance for basing lending decisions on non-financial personal characteristics. Lenders who makes the decision not to do business with a promising client on the basis of gender are doing themselves no favours - and are a dying breed. That being said, few would be naive enough to suggest that sexism is nonexistent in business or that the playing field is entirely level in all industries.
Female entrepreneurs should expect to play by the same rules as their male counterparts. Consider the reasons above as to why some applicants are more successful than others. Choose to do business with the right partners - this includes your banker, and leverage the available resources that BC has to offer its female business owners, such as the Women's Enterprise Centre, a great resource for female entrepreneurs looking for financing assistance, skills development or mentorship.
PHOTO CREDIT: Photo 42-15507542 created by shirishbendre, on Oct 5, 2007. Photo made available under a Creative Commons Attribution-Noncommercial license. Last viewed on Mar 4, 2011.