We must create equitable opportunities for female entrepreneurs. Here's how we're making strides for women in 2023.

As we celebrate International Women's Day with the theme of embracing equity, it's essential to reflect on how much more can be done. Access to funding for women-led businesses is crucial, yet numerous obstacles still exist. Issues like gender biases, restricted networking, and unfair lending practices hinder women's entrepreneurial growth.

My commitment to bridging this gap motivated me to establish an asset-based lending firm for female entrepreneurs, JPalmer Collective, on International Women's Day in 2023. Let's explore our mission and goals for the future.

The Funding Gap

Just like the gender pay gap, there exists a significant funding gap. Women own 42% of businesses—almost 13 million—and accounted for 49% of new business startups in the U.S. in 2021. Logically, funding should align with these numbers. Yet, nearly 75% of female entrepreneurs report challenges in securing funds. Research indicates that women have a lower approval rate for loans than men; only 32% of women seeking funding are approved. Moreover, loans for women are, on average, 33% smaller than those received by men.

Women are also under-represented as both venture-backed entrepreneurs and investors. Female-founded companies attract less than 3% of total venture capital, while women make up less than 15% of investors. Gender stereotypes often label women as high-risk and less stable. However, it's important to note that women-led startups often outperform their male counterparts, generating more than double the revenue per invested dollar!

Taking Risks

Another factor contributing to lower funding for women is their tendency to be more cautious. While this instinct can serve them well as leaders, avoiding risks can stifle business growth. We need to shift the perspective on risk, helping women see it as a pathway to realizing their business's full potential rather than a threat. Women often understate their capabilities but exceed expectations (something I've encountered firsthand in my funding journey!). Moving forward, we must encourage women to confidently showcase their achievements to potential investors and lenders.

Know The Alternatives

As women increasingly gain financial independence, many lack the experience men have in navigating complex financing landscapes. This prompted me to create JPalmer Collective, aimed at educating women-led businesses on the advantages of debt, whether used alone or in combination with equity. Often, women hesitate to seek investors due to concerns about sharing ownership and profits, especially if they plan to sell their business.

Debt can serve as a viable working capital option, allowing women to retain control over their business and ownership stakes. When presented with the right context, debt doesn't have to evoke anxiety about overwhelming bills. Instead, a line of credit can empower women with the necessary working capital while allowing them to maintain decision-making authority and a larger share of their profits.

The Future of Financing is Female

Ultimately, businesses cannot thrive without access to working capital, and women-run enterprises deserve equal funding opportunities as those led by men. We must ensure that financing is inclusive, leveling the playing field and enabling women to secure the resources they need to flourish.