Business banking for women
How specialist banking services for women can help more female entrepreneurs access finance
Britain needs more female entrepreneurs. People starting and growing businesses are increasingly identified as those who hold the key to the UK’s economic recovery, making it a problem that women are less than half as likely as men to start their own business.
Worryingly, the rate of female entrepreneurship actually looks to have stalled in recent years, and only around 15% of British enterprises are majority-led by women.
The Women’s Enterprise Task Force, a government body that ran from 2006-9, found that if UK women were to reach the same enterprise levels as their US counterparts, for example, there would be around 900,000 more start-ups in Britain, and an extra £23bn GVA (gross value added – the value of goods and services produced in an area) each year.
Access to enough finance is certainly one of the biggest barriers to starting – and growing – a business, and signs suggest that it is women in particular who struggle to overcome this critical hurdle.
So why do women get less money from banks to start their businesses?
The reasons are complicated, but the assumption that banks are less likely to lend to female entrepreneurs is untrue. Again, research has found that women tend to succeed at or above the rates of men when seeking bank finance. They are less likely to have been rejected due to poor business planning, and are actually a ‘safer bet’ for banks, as there is seen to be a smaller chance of them being unable to make a repayment on loans.
What are the specific challenges for female entrepreneurs?
There are however a number of specific challenges women face when it comes to securing a bank loan.
Cautious approach. Women are likely to have a more cautious approach to debt, tending to be more risk-averse then men and therefore turning down the loans that could help their businesses get off the ground and grow sustainably.
Lack of networks. Other factors could include a lack of networks and contacts to provide valuable information and advice surrounding the process of applying for a business loan, which can seem a formidable process to those starting up a business.
Not enough role models. Furthermore, with women more likely to be juggling family commitments, and with fewer female entrepreneurial role models who are able to inspire confidence, tailor-made support for women entrepreneurs is needed to address the entrepreneurial gender disparity. It is for this reason that the banking world now contains specialists in female-led companies.
Specialist women in business advice services
For example, NatWest’s team of 200 women in business specialists are able to put women in touch with relevant local organisations and professionals, as well as its own strategic partners to help with training and mentoring.
Furthermore, its specialists are there to understand clients’ local markets, helping them find solutions to specific challenges. In this way banks such as NatWest have made a commitment to supporting women entrepreneurs in the UK, and will play a part in encouraging the rate of female entrepreneurship to rise.
Accounts, cards and loans for everyday business banking, NatWest business banking has a number of solutions to help your business get ahead.