Women entrepreneurs face financing challenges
Published in Prairie Manufacturer Magazine.
“They wouldn’t lend to someone like me.”
That was among the moving comments from a recent national survey of more than 1,000 women entrepreneurs in Canada, and it was endorsed by 40 per cent of respondents, across all intersectional groups.
With funding from the department of Women and Gender Equality, the Women’s Enterprise Organizations of Canada (WEOC) conducted the study (release date October 2022) to learn more about women entrepreneur’s access to business loans, venture capital, and angel investment.
One of the most consequential decisions faced by entrepreneurs is whether to rely on their own funds or look to external lenders to finance business growth. The research revealed that while two-thirds of respondents intend to grow their businesses within the next three years, just 50 per cent had applied for financing in the past three years.
Interestingly, more than 65 per cent of those respondents who had applied for funding (including loans, lines of credit, increased credit card limits and mortgages) from banks did receive full or partial approval.
With a 65 per cent success rate, why are more women entrepreneurs not then seeking funding through banks? For many respondents of our study, the issues lie with the application process itself, including uncertainty around the process, available products, and general eligibility. Respondents mentioned a lack of transparency about what information is required and how an application is assessed, as well as an undue amount of time required to complete the process.
The good news is that the process can be changed. Banks and other lenders can address the barriers head on by reassessing and redesigning their processes. And women entrepreneurs can seek support from other organizations, including WEOC, which is now delivering the WEOC National Loan Program with the help of expert Loan Fund Partners across the country.
WEOC’s Loan Fund Partners are committed to following gender-specific principles, have the desire to work with women entrepreneurs at every business stage, and consistently deliver top quality business supports including business advising, training, and loan aftercare.
We know that there is no such thing as a typical woman entrepreneur and the lending process must be adaptable. The WEOC National Loan Program has the holistic approach of a micro-loan combined with wrap around business supports that acknowledge the unique needs of women entrepreneurs, and it is offered on an ongoing basis. This model provides consistency in lending practices yielding inter-reliability in adjudicating loans across the country.
Supporting the success of women entrepreneurs not only has deep economic benefits for Canada, it also provides women with financial independence, contributes to community stability, and is the foundation for future generations of entrepreneurs.