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Why Do Fewer Women Apply for Business Loans?

I have a confession to make. In my career as a commercial lender, helping small to mid-sized businesses obtain government loans, I have worked with far fewer women-owned businesses than those owned by men. This is not because there is a shortage of female small business leaders. While we would like to see far more, women-owned businesses currently make up 39 percent of the 28 million small businesses operating across the United States, according to the 2018 Women’s Entrepreneurship Report from SCORE.

The problem is that as few as one in four female entrepreneurs apply for business financing, and when they do, they ask for substantially less than male business owners. This, plus the fact that the women I have worked with are some of the finest entrepreneurs I have ever met, keeps bringing me back to the same question: Why do fewer women apply for financing to grow their businesses?


While the World War II poster of Rosie the Riveter saying “We Can Do It” may seem outdated, perhaps it’s not when it comes to women and business financing.

A survey by the National Association of Women Business Owners (NAWBO) shows women appear to be relying on themselves, rather than lenders, and they are likely to turn to personal sources of income. About half say they have relied on credit cards to better their businesses. Others cite personal loans, personal collateral and personal guarantees. Very few have sought SBA loans, commercial loans or private loans.

A substantial portion of women surveyed were also unfamiliar with SBA loans as one of the most popular avenues for growing a small business. An astounding 65 percent said they were unfamiliar with SBA 504 loan programs as well as a suite of other SBA offerings, according to the NAWBO survey.


I’m working with a woman right now who is reluctant to ask for the amount of money that she really needs to take her business to the next level. She is already a resounding success. In fact, the demand for her services is so great that she has outgrown the leased office space she occupies and can’t meet demand (or hire new employees to help her) unless she gets funding to purchase a larger space.

So why did she hesitate to apply for financing? After much discussion, we realized she did not have a complete understanding of what she can afford.

I have come to see there are many small business owners – men and women — who have little to no exposure to this type of financial skill. Many don’t have a full understanding of equity, nor do they know the difference between cost of goods sold and an expense on their income statement. They rely heavily on a QuickBooks program or friends to guide them.

But it appears the financial literacy gap is wider for women. A George Washington University study found that female college students are less enthusiastic about financial topics, less confident and less willing to acquire financial skills than male students. These differences have also been observed in high school students.


That sub headline should really say “what we all can do.” While it may take time for the gender gap to close as more and more women pursue careers in business, there are things that both business women and lending partners like me can do now.

Leverage the right financial tools

When I, or any other loan partner, encounters a woman business owner who could use support in financial skills, I view it as our job to take the extra time to assist. Whether it’s a referral to the local SCORE or Small Business Development Center (SBDC) or just taking the time to walk them through their balance sheet, this support can make a major difference and benefit everyone involved.

One of the things I like best about assisting businesses with SBA 504 loans is that the process requires you to get your proverbial ducks in a row. When was the last time you updated – or prepared – a business plan, mission statement or company vision? Do you have financial projections? Do you have enough working capital to take on a downturn, or grow sales faster than you’ve ever dreamed? These are financial essentials that we can tackle together.

Connect with the right loan partners

A loan partner is your guide through the loan process – a liaison between the bankers who will fund your senior loan and the federal, state and local agencies that fund the subordinate loan or guaranty. A good loan partner is there for you, supporting your project and moving it toward approval. A really good loan partner should explain that they will be critical of your project as well. I warn business owners that I’ll be doing some digging to understand the good and the bad so I can tell your story fully and accurately in the loan application. By addressing any issues or concerns, a good loan partner is able to show how you, the business owner, are ready to tackle change when it arises.

Educate early

I remember when my kids were in fourth grade they got a little taste of the entrepreneurial spirit. The class project had the kids selling trail mix to their fellow students. They had to plan their inventory, establish an advertising campaign, produce a product, execute sales and ultimately try to make a profit. What a great exercise to show children how to get behind the numbers, experience the reality of having leftover goods that didn’t sell, or an advertising campaign that just didn’t work with sales falling short of the goal. My preference would be to start even earlier and build on an entrepreneurial project every year so our kids can understand what it’s like to own and run a business.


Do women perceive financial help as a sign of weakness when it comes to running a business? Are we trying to balance so much that there seems to be no time to go through the detailed process of obtaining a government loan? Is a lack of financial literacy a contributing factor? It only takes one of these factors to get off track. By recognizing them, we can course-correct our current and younger generations of savvy business women on the path to entrepreneurial success.

Marie Shires

Marie Shires is a vice president and relationship manager for Seedcopa + SeedcoDE, a private nonprofit company that works with lenders to help small to mid-sized businesses in Pennsylvania and Delaware obtain government loans. A native of Wyomissing, Marie can be reached at or 610-321-8245.

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