Bank Loans and Women

Businesses owned by women are smaller than businesses owned by men. 

In a comprehensive article for the Wall Street Journal, Sharon G. Hadary examines what's holding back women entrepreneurs such that the latest data (2008) shows "average revenues of majority women-owned businesses were still only 27% of the average of majority men-owned businesses."

Why the difference in revenues?  One reason is that women-owned businesses are under-funded.  According to the National Women's Business Council (.pdf), all small businesses face challenges finding capital to grow. The amount of capital women business owners receive is less than that of men.

I have applied for angel investor funding, willing to share ownership of an enterprise to raise capital in order to start and grow it.  Failing to receive funding, my plan has been to muscle through and invest my company's profits into growth.

That's the very mind set that may keep my company small.  Hadary writes, "For expansion capital, most [women] turn to business earnings, which usually limits growth potential."


Women-owned businesses need to establish relationships with bankers. Applying for a small business bank loan to start and grow an enterprise never occurred to me.  That's debt.

Hadary writes, "Research shows that women tend to view debt as a 'bad thing'… Research supports the idea that one of women's strengths is relationship building, yet women seldom focus on building relationships with bankers. Lack of relationships with bankers and limited knowledge about financial products and services explain to a great degree why more women don't seek more sophisticated forms of financial products and services."


I was grateful to Kelly Kendrick, Assistant Vice President of First Bank and Trust Company, for answering for Handshake 2.0, "What are three questions companies can ask themselves to decide whether or not a business loan from a bank might be right for them?"

As a woman-owned business that intends to grow, these are questions I will now start asking and answering.


Photo credit: Mary Anne McElmurray

First Bank & Trust, a client of Handshake Media, Incorporated, the parent company of Handshake 2.0,  specializes in business loans, business credit, and business finance.

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  1. Question: do you feel there is a difference in having a mortgage vs. having a business loan, in the context of debt?. To me it’s about managing the risk, I’d rather have a business loan than a mortgage on a house. I have more control over the growth of my business than I do the real estate market, where one typically expects a return on the investment in the house. Whereas an investment in my business that is growing faster than the real estate market, makes more sense ;especially at the bottom line.
    But alas, most bankers will not see that. gotta get way from the need to see brick and mortar. Until THAT happens, I’m concerned about the lack of available funds for any small biz, let alone those owned by women.

  2. Thoughtful and interesting comment, Monica. That you even mention “managing risk” is the kind of thinking that contributes to business growth, I think. Handshake 2.0 will celebrate its second anniversary on July 28 – I have not once had a conversation on this topic with women or men. Mortgage vs. business loan? Great question. Thanks for helping me think – and grow!

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