Increasing access

Although the number of women-owned businesses increased by more than 100 percent between 1986 and 1999, a recent report indicates that lending to women business owners has not kept pace.

The report, “Economic Prosperity, Women and Access to Credit,” released in October 2000 by the National Women’s Business Council and the Miliken Institute, indicates that a persistent gap remains between the need for capital and actual lending to women-owned businesses. According to that report:

* Women receive only 12 percent of all credit provided to small businesses in the U.S. economy even though they own close to 40 percent of all businesses in the United States.

* Of the $9.83 billion in SBA-backed loans made to small businesses from October 1999 to June 2000, women were awarded just $1.57 billion — a mere 16 percent.

* While nearly 75 percent of women-owned firms are able to access credit in one form or another, about 60 percent of these businesses use nontraditional finance sources, such as finance companies, for their business credit needs.

In addition to highlighting a number of “lending and learning” programs around the country specifically designed to address the needs of women entrepreneurs, the report makes the following recommendations to increase access to capital for women business owners:

* Amend Federal Reserve Regulation B, the Equal Credit Opportunity Act.

* Create new credit-scoring models.

* Establish a National Capital Access Program.

* Increase lending through securitization.

* Institutionalize the Economic Census, the Survey of Women-Owned Business Enterprises and the Survey of Small Business Financing. Source: National Women’s Business Council,