Recently in the Access to Capital Category

The dawn of the New Year provides an excellent opportunity to review the successes of 2014, and to assess areas of improvement for 2015. The National Women's Business Council's annual report, "Building Bridges: Leveraging Research and Relationships to Impact the Business Climate for Women" does exactly that, providing us with an overview of women entrepreneurship, including a summary of key research findings, policy recommendations and the Council's agenda in the year ahead. The report rests on NWBC's four pillar platform- access to capital, access to markets, job creation and growth, and data collection- and confirms what many of us already know, that the full economic participation of women is essential to economic growth in the U.S. 


Access to capital remains a key issue for women business owners. In order to better understand the ways in which women business owners accessed capital, NWBC worked with the SBA to analyze loan data, partnered with Walker's Legacy to host a round-table specific to women of color and access to capital, and commissioned new research on under-capitalizationThe research shows a direct link between access to capital and revenue generation, with men starting their businesses with nearly twice as much capital as women, a disparity which increases among firms with high growth potential. The report highlights crowdfunding as an important new resource for women business owners seeking capital.

The NWBC also focused much research on access to markets for women business owners, using WIPP's own ChallengeHER campaign as a building block for identifying best practices in government procurement. Thanks to the Women Owned Small Business Federal Contract Program, more and more federal contracts are being awarded to women owned small businesses. However, disparities still remain in regard to award amount between WOSBs and non-WOSBs, most likely as a result of different contract types. 

In 2013, the Council called for an increase in the number of women owned or led firms in incubators and accelerators in an attempt to increase job creation and growth. In 2014, the Council honored this commitment, through championing the SBA's Office of Investment and Innovation's Growth Accelerator Fund Competition, convening a public meeting on STEM, entrepreneurship, and women, and commissioning new research on micro-businesses and accelerators and incubators. Research shows that women with dependent children are less likely to add additional employees, indicating that child care burdens are still a significant obstacle to the growth of women owned small businesses. 

The report concludes with a number of different, concrete strategies for each pillar, building off of past success while also acknowledging areas for improvement. Among many other things, the NWBC recommends: tax credits for investors who finance women-owned and led firms; creating opportunities to align women business owners with government and corporate procurement officials; improvement of the availability and timeliness of government and private sector data on women owned small businesses; the implementation of the sole source authority for the Women-Owned Small Business Federal Contract Program (yay!). 

The National Women's Business Council is a crucial resource for women entrepreneurs and business owners. The research and recommendations they provide acts as a road map for the success of women entrepreneurs, success which is reached through hard work, partnerships and persistence. 2014 was a great year for women entrepreneurs, and 2015 looks just as promising. 

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A new report issued by the
National Community Reinvestment Coalition found large, unsettling inconsistencies in lending patterns for small businesses starting in the years following the Great Recession. The report, Small Business Lending Deserts and Oases, outlines the ways in which access to credit for small businesses is affected by geographic and demographic characteristics. Although overall lending to small businesses plummeted during the Great Recession, women and African-American owned small businesses were found to be disproportionately affected, along with small businesses located in the Midwest and the South. Importantly, the NCRC found that counties with little access to Women Business Centers (WBCs) or Community Development Financial Institutions (CDFIs) had the lowest rates of lending for small businesses. The report spanned both the private sector and federally funded lending, painting a comprehensive picture of the barriers that small business owners are facing today.

The NCRC made several recommendations for leveling the playing field when it comes to small business loans, among them increasing the number of WBCs and CDFIs in the so-called "lending deserts". The NCRC also recommended additional research, especially on the lending patterns in the private sector. Although this report affirms the findings of studies before it, it sheds a new light on both the geographic and demographic disparities in small business lending, and confirms the need for proactive programs such as WIPP's Women Accessing Capital program. 

The report was funded through the WE Lend Initiative, established by the Sam's Club Giving Program to increase access to capital for women entrepreneurs. WIPP partners with NCRC on the WE Lend Initiative, which also is assisting Women Business Centers in becoming micro-lenders and preparing standardized financial education curriculum for women business owners utilizing these Centers. 


Women Impacting Public Policy joined a recent White House Business Council Meeting to share how various policies are affecting women business owners across the country. The meeting included several White House staff along with top officials from the Department of Commerce and the Small Business Administration.

 

At the meeting, WIPP stressed the importance of capital access as the critical issue for women business owners looking to start and grow their companies, and highlighted WIPP's 2013 Annual Survey finding that it takes an average of two attempts for women business owners to secure funding.

 

Commerce Undersecretary for Economic Affairs, Mark Doms, agreed that the economy would be best served by giving business owners more access to capital. The Commerce Department's new strategic plan, America is Open for Business, reflects that priority by stressing innovation and investment.  

 

SBA Associate Administrator for Capital Access Ann Marie Mehlum concurred, saying her office will continue to identify opportunities to expand access while strengthening SBA's already available capital access programs. She went on to highlight the 7(a) loan program, which supported more than $15 billion in small business loans in FY13.

 

The meeting closed with a discussion of how trade can be used to fuel growth for businesses of all sizes. The Administration agreed there is a need for streamlining and simplification in exporting as well as engaging the women's business community on the value of selling goods and services abroad. Both of those priorities are at the front of WIPP's ExportNOW program that encourages women entrepreneurs to grow beyond our borders.

 

These meetings are open dialogues with policymakers, giving WIPP's advocacy team the opportunity to share ideas and concerns raised by WIPP's members.

By Roz Klann



          We thought we flat lined, but now there's a pulse. According to the Small Business Administration (SBA) Office of Advocacy's annual report, small business lending is finally picking up. While this is good news for women entrepreneurs, there is still significant room for improvement. The report indicates overall lending conditions for businesses have improved, but obtaining loans continues to be a struggle for small businesses.

          The 2012 report reaffirms many of the recent trends in small businesses lending, including small traditional lenders remain the most widely used by small businesses. Additionally, credit unions and financial institutions have become important lines of credit for the small business community. Despite a shrinking banking industry in recent years, small businesses continue to seek loans in local markets. Chief Counsel for Advocacy Dr. Winslow Sargeant at the SBA said this about the current climate for small business lending, "While overall small business lending continues to decline, we are not seeing the sharp decline we saw in recent years. More importantly, the study shows an increase in the number of small business loans which underscores the positive turn in our country's economic landscape."

          The total number of small business loans increased from $21.3 million in 2011 to $23.5 million in 2012. While this is an improvement from recent years, the report suggests that identifying new methods for calculating credit scores could increase access to loans for small business owners, which in turn will continue our nation's economic recovery. Until then, WIPP will keep checking the pulse. 

Grassroots Advocacy at its Finest

2:30 PM May 7, 2013

Women Impacting Public Policy exists to give women entrepreneurs a seat at the legislative roundtable in our nation's capital; and WIPP members nation-wide are stepping up to fill that seat. No matter how many boots we have on the ground in Washington, there is nothing more powerful for Members of Congress than hearing from their own constituents, so our members have been meeting with their Representatives in their home districts.

Members have met with their Senators and Representatives to share how the policies manufactured in DC can affect their lives as small business owners. In addition to sharing how legislation affects entrepreneurs, our members are also sharing some policy guidelines for important issues. Chief among the topics discussed during these meetings are procurement and access to capital.

WIPP is dedicated to building a robust Women-Owned Small Business Federal Contract Program (WOSB) that will allow the government to reach and hopefully exceed its 5% goal for contracting to women-owned businesses. In FY12, the first year of the WOSB program, only $72.5 million was awarded to women-owned businesses - that is less than the cost of a single drone. With the recent lifting of the contract award limits on the WOSB program we expect this program to successfully do what it was intended: help women do business with the world's largest customer, he federal government.

Another area of policy that needs attention I access to capital. Every time we survey our vast array of members, access to capital is continually atop the list of concerns for small business owners. Our members have used their meetings as a forum for discussion toward addressing the dearth of capital for our entrepreneurs; to that end they have helped us urge Congress to take the following steps to free up much needed capital: One, raise the current cap on credit union lending to small businesses. Two, urge the Securities and Exchange Commission to promulgate rules to allow crowdfunding to thrive. Three, support the SBA Microloan program. Four, increase funding or much needed financial business training for women-owned businesses through programs funded through the SBA and the Department of Agriculture.

Bringing these messages to congress will no only help alleviate the impediments to growth set on our businesses today, but will also help shape the policies of tomorrow. Together with the support of our partners, the powerful advocacy of our members and the cooperation of our Representatives of Congress, we will unleash the power of America's fastest growing economic segment - women entrepreneurs.

By Cielo Villasenor, WIPP Government Relations

 

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