A recent report highlights the substantial challenges female founders face in securing finance.
- Nearly 39% of female entrepreneurs struggle to expand due to limited financial access.
- Ethnic minority female founders experience even more pronounced financial barriers.
- Over half of female founders are uncertain about equity investment.
- Calls for improved support measures for female entrepreneurs are growing.
In a recent study, it is revealed that nearly 39% of female small business owners in the UK are hindered by inadequate access to finance, which significantly impacts their plans for scaling up. This lack of financial resources is leaving many of these entrepreneurs unable to expand their businesses as intended.
The financial challenges are even more severe for ethnic minority female founders, with a staggering 88% relying solely on personal funds to initiate their ventures. For many, acquiring external finance remains a difficult and, at times, an inaccessible option, leading them to consider it unfeasible.
Despite the drive for independence being the primary motivator for 60% of women to start their own businesses, there is a noticeable gap in knowledge and resources. Many women lack the understanding necessary to engage in equity investment, with almost half expressing distrust about the prospect of an investor taking a stake in their company.
Janan Leo, a female entrepreneur who funded her startup independently, recalls, “Money was incredibly tight and there were days when I sacrificed lunch.” Her story underscores the broader issue of unfamiliarity and discomfort with the financial sector that deters many women from seeking external funding.
Efforts to address these challenges include proposals for early-stage interventions aimed at fostering gender inclusion and entrepreneurship among women. These measures suggest creating more inclusive financial opportunities, enhancing financial literacy through targeted training programmes, and offering mentorship and support networks for female entrepreneurs.
Addressing the financial challenges faced by female entrepreneurs is crucial for fostering economic growth and entrepreneurship in the UK.
