Tomorrow is International Women’s Day (IWD), a day set aside to celebrate women and their economic, political, and social achievements around the world. IWD has been observed since in the early 1900’s and was first celebrated by the United Nations (UN) in 1975.
The UN’s theme for 2017 is “Women in the Changing World of Work,” and there is no doubt that, here in the U.S., exciting things are happening for women entrepreneurs and small business owners. The number of women-owned firms and their economic impact continues to rise at rates higher than the national average with even stronger business launch rates since the recession.
A Wealth of Positive Trends
According to data from the 2016 State of Women-Owned Businesses Report commissioned by American Express OPEN:
- There are 11.3 million women-owned businesses in the U.S., employing nearly 9 million people and generating over $1.6 trillion in revenues.
- Women-owned businesses comprise 38 percent of the business population, employ 8 percent of the country’s private sector workforce, and contribute 4 percent of the nation’s business revenues.
- Since 2007, there have been 1,072 net new women-owned firms formed every single day.
Among the many positive trends for women-owned businesses relative to national business trends, here are a few of the most notable:
- While the total number of firms increased by 9 percent between 2007 and 2016, the number of women-owned firms increased by 45 percent, or five times the national average.
- Women-owned firms employing between 50 and 99 workers have spearheaded a 27 percent increase in employment since 2007. In comparison, the positive employment growth among all firms has been among those with 100 or more workers.
- Business revenues among women-owned firms have increased by 35 percent since 2007 compared to 27 percent among all U.S. firms, a rate that is 30 percent higher than the national average.
- The 10 fastest-growing states for women-owned firms since 2007 are found in every region of the country: North Dakota, South Dakota, Texas, Iowa, Indiana, Wyoming, Georgia, Tennessee, Utah, and Maine.
The progress for minority women has been particularly swift:
- Women of color owned 78 percent of the 3.5 million women-owned firms launched between 2007 and 2016.
- The number of African American women-owned firms more than doubled during the past nine years while the number of Latina-owned firms increased by 137 percent, the highest increase seen among minority women-owned firms.
- Businesses owned by Asian American women also grew in numbers, comprising 41 percent of all Asian American-owned firms in 2016.
Challenges Include Access to Financing
Though this is all good news, it is also clear that there is still a long way to go. While the share of women-owned firms keeps climbing, their share of employment and revenues remains unchanged. Despite increasing industry diversity with women making strides in areas like utilities and mining that have been dominated by male-owned firms, the greatest share of new women-owned firms are in historically traditional sectors: other services (which includes hair and nail salons), administrative, waste management services, and accommodation and food services.
Studies have found that women do not have sufficient access to loans and venture investment compared to their male peers. A 2015 U.S. Senate Committee on Small Business and Entrepreneurship report noted that women accounted for only 16 percent of conventional small business loans and 17 percent of SBA loans.
As women look for ways to grow their businesses, it can be challenging to obtain working capital financing from traditional lenders with whom the process of applying for loans can be slow and require extensive documentation. The same report showed that women only account for 4.4 percent of total dollar value of conventional small business loans from all sources. In other words, just 1 dollar of every 23 dollars in conventional small business loans goes to a woman-owned business.
The U.S. Small Business Administration (SBA) and other nonprofit and for-profit organizations are working to improve the financing climate for women entrepreneurs. In addition to loan programs, the SBA’s Office of Women’s Business Ownership provides education, training, and extensive resources to help women start and grow their own businesses.
Summit Financial Resources is proud to be a resource for women business owners who need working capital to sustain and develop their businesses. We celebrate International Women’s Day by honoring their significant achievements and renewing our commitment to helping them move beyond financial barriers on their road to continued success.
Working Capital Financing is a few clicks away.
Summit Financial Resources specializes in working capital financing for small to medium-sized businesses that need increased cash flow. We provide working capital financing through invoice factoring, asset-based lending, inventory lending, and equipment financing.