Study: Female Business Owners 20 Percent Less Likely to Be Approved for Bank Loans

By:
Chris Gaetano
Published Date:
Oct 23, 2017
Loan

A recent study found that while 50 percent of all business owners in general were able to get a bank loan approved over the last three months, when looking only at female-owned businesses, that number drops to 30 percent, according to Inc. The findings come from a survey of business owners of companies with up to $100 million in annual revenue, conducted by researchers at Pepperdine University and Dun & Bradstreet Corp. But the survey also found that most women expect getting a loan to be tough anyway: only 21 percent felt it would be easy to secure debt financing over the next six months, versus 44 percent of all companies. This could explain why they are also less likely to seek out bank loans at all, as 67 percent of female business owners said they were likely to pursue one versus 75 percent of all business owners. At the same time, female business owners think not being able to get a bank loan will negatively impact them more than business owners in general, 64 percent versus 44 percent. 

Women face similar funding issues outside bank loans. Another study published this year found that only 3 percent of all venture capital funding goes to companies headed by female CEOs, and that all-male teams are four times more likely to be funded than mixed-gender teams. This in turn recalls another study from 2014 that shows that male investors are 60 percent more likely to respond favorably to a pitch when it's given by a man, even when the content is the same.  The study also said in a controlled experiment the researchers conducted, identical business-plan videos were narrated by either male or female voices; respondents chose the plans presented by males 68 percent of the time.

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