Average Business Loan for Female Entrepreneurs Dropped Nearly 50 Percent From Previous Year

Chris Gaetano
Published Date:
Mar 7, 2018
Pay Gap

Business loans for female entrepreneurs plummeted between 2016 and 2017, falling by nearly half, while rates for male entrepreneurs remained stable, according to CNBC. The study of 27,000 small businesses, conducted by small business funding firm Biz2Credit, found that the average funded business loan for a woman-owned firm dropped from $99,000 in 2016 to $57,097. In contrast, business loans for male entrepreneurs remained stable at $103,604. This lending disparity tracks with a similar revenue disparity: businesses run by men made had revenues about $242,000 higher than businesses run by men. The study noted that, one, many woman-owned businesses are younger startups with shorter track records and lower credit scores (though it might be worth considering that younger startups with shorter track records don't seem to bother venture capital firms, so long as such firms are led by men). Another factor is that many of the businesses led by women tend to be in the food, hospitality, retail and service sectors, which did not do as well compared to IT, construction, warehousing or logistics, which tend to be dominated by men. The study also noted that the rise of online services threatens the former group but supports the latter group. 

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