It was just over a hundred years ago, in 1919, that women became legally allowed in the UK to be solicitors and chartered accountants, and it wasn’t until 1958 that Hilda Harding would become the first woman bank manager in Britain, and 1975 for discrimination against women in work, education and training to be officially illegalised. With such milestones being achieved in only the last century, what other challenges remain in the way of women in business and funding in 2023?
Why are women still less likely to own a business?
With only one in three UK entrepreneurs being female and women accounting for less than a quarter of business owners, and despite the introduction of laws promoting equality between genders in the 20th century, women today still face challenges that can be directly linked to the understanding and expectations of gender roles. Research by The Alison Rose Review of Female Entrepreneurship shows that:
- Women are twice as likely than men to mention family responsibilities as a barrier to starting a business
- Women typically have higher risk-awareness than men, and are also less likely to believe they possess entrepreneurial skills
- With less female entrepreneurs around, women are also less likely to know other entrepreneurs or to have access to a sponsor, a mentor or professional support network
- Female-led businesses receive less funding than those headed by men at every stage of their journey, making it hard to get started or to target growth efficiently
- Access to funding is cited as an additional barrier faced unequally by women entrepreneurs, with half of women applying for a loan or investment for their new business being rejected
Despite legislation and societal changes attempting to recalibrate the scales, it is clear that more still is needed to ensure women are provided equal opportunities in business, which is where business owners, introducers and lenders can play a pivotal role by ensuring two key things.
Firstly, our industry needs to provide female entrepreneurs with better access to information about the funding options at their disposition that can help them meet their ambitions. Where traditional banks and investors reject 50% of applicants, introducers are best positioned to help steer them towards other forms of financing such as asset-based lending where there can be less prejudice against the profile of the borrower depending on the strength of the asset(s) at play.
Setting the example: empowering women in business
Secondly, the financial industry must ensure it is more accessible to female-led businesses, but also to female employees. Whilst the issue of gender roles, stereotypes and expectations are still being tackled in society today, an inclusive approach to business funding can be achieved easily by all lenders across the country. With an emphasis on inclusivity and diversity within their own practices, business funders and introducers can look to expand their portfolio whilst supporting a thriving business community that itself can promote additional diversity through its workforce, products and services, and the clients it caters for, thus helping to further reduce inequalities slowing women down on their path to success.
An easy approach to remedy this is to ensure women are represented amongst lenders, brokerages, accountancy firms and other introducers by making the most of diversity within their own teams to facilitate an inclusive culture that benefits from varying points of view. Although finance is still considered a male-centric industry by many, progress has been achieved in the last few years: in 2021, 60% of the signatories of the HM Treasury Women in Finance Charter had increased female representation within their business, with most of them citing alterations to their recruitment practices and a focus on developing female talent as the driving factor to thank for it.
That being said, within the same research it was also reported that for the first time since the launch of the charter in 2016, the average level of female representation has remained flat year on year due to the remaining third of signatories citing a decrease in representation at their business. What this means is that women working in business lending still face hurdles themselves, and that there is a continued need for inclusive job advertising, hiring practices and promoting cultures to ensure as an industry, we keep moving in the right direction.
There is a growing demand for female-led funders and programs that can understand the particular needs of women in business and provide strategic help where other lenders may fail to recognise the challenges of funding faced by women. In light of that, it is important that existing funding partners and introducers attract and retain great female employees and leaders not just to remain competitive in a tough market but more importantly to offer equal opportunities to all entrepreneurs.
Ultimate Finance’s Head of Relationship Management Emma Booth explains, “It has been interesting to see the evolution of business lending and the part that women have played by making sure they could get a seat at the table when only just a few decades ago it was seen as a men’s world. Today we see businesses and institutions set up purely to focus on funding businesses set up by women to tilt the balance closer to the middle, which shows there is still work to be done to ensure we achieve equality in funding to offer equal opportunities”.
Alice Williams, Regional Director at Ultimate Finance, adds, “Recently my colleague Kay Williams and myself decided to organise a Spa Day for female introducers and see whether we could take a completely different approach to the way we usually work together. The results were incredible: through our shared experiences in the industry, we all found a place built on equality and support, where we turned vulnerabilities into strengths and discussed how we can help empower women and their businesses through our work”.
All of us at Ultimate Finance are proud to support International Women’s Day and remain committed to making a difference for women in business through an inclusive approach. Find out more about our ESG commitments.