This was borne out in the British Business Bank’s latest Small Business Finance Markets report, which found perceptions of rejection disproportionately prevented women-led smaller businesses from seeking finance in 2016 and 2019.
Another key issue is access to support and advice through mentoring and networks, as these provide knowledge and critical access to business development opportunities.
Just 5 per cent of women entrepreneurs have a mentor compared with 12 per cent of men, yet those who are mentored were 40 per cent more likely to recover from the pandemic.
Action needed
It’s clear there is no silver bullet. To support fairer funding for women founders and boost the economy, collaboration is needed across the private and public sector.
A crucial first step is education in the financial services industry, to gain a greater understanding of this issue and the potential unconscious and systemic biases at play.
Only by doing this can we work to eliminate any potential bias in the system – such as through internal assessments of policies and funding criteria, or training on overcoming unconscious bias.
Further still, as an industry, we should educate women business owners, directing them to a range of resources that will help them succeed.
This includes educational tools or networks designed to help support entrepreneurs on a range of topics, from applying for funding – whether this be grants, loans, alternative finance or private equity – to trading overseas, assessing supply chains or operating more efficiently.
Improving representation in financial services, especially at a leadership level, is also an important part of this.
This shouldn’t be a tick box exercise – representation matters. Removing the barriers women face in the financial services industry will go hand in hand with creating a better and fairer experience for all customers.
The financial services sector has a huge task ahead of it, and I am encouraged to see so many initiatives already taking shape across our industry.
However, given this is a societal challenge, government support will be critical to maintaining momentum and achieving industry-wide change.
In February 2024, the government launched a women-led high-growth enterprise taskforce, which aims to unlock £250mn in funding for female founders.
Additionally, in January, the Labour party set out its plans to improve inclusion and diversity in financial services.
These plans include formal guidance led by the Financial Conduct Authority and the Prudential Regulation Authority.
They also build on the Investing in Women Code by setting an investment allocation target for women and ethnic minority founders.
So, while this remains a very real issue for women entrepreneurs, it is encouraging to see cross-party support for creating a fairer finance sector.
Following the general election, we'd urge the successful party to keep on championing this critical issue and help us to realise the potential of the UK’s women entrepreneurs.
