Women Business Owners Underserved According to a New Survey
The results of the survey of women business owners conducted by National City Corporation (NYSE: NCC) were announced today. Women entrepreneurs have a 50 percent or greater stake in nearly half (48 percent) of all privately-held businesses in the United States and they generate approximately $2.3 trillion in sales and employ 19.1 million people nationwide, according to the Center for Women's Business Research. Despite this economic clout, the survey results show that, on average, women-owned businesses remain an underserved segment and are less likely to take advantage of the credit that's available to them. National City is a corporate partner with the Center for Women's Business Research, which assisted in the development of the questionnaire.
According to Sharon Hadary, Executive Director of the Center for Women's Business Research, "The survey findings are consistent with the Center's research. Access to capital for women business owners is one of the key factors in the continued growth and expansion of women-owned enterprises."
Almost 41 percent of the women business owner respondents said they do not have credit services with any bank or financial institution. Of this group, one out of three (33 percent) attribute their lack of credit to being a start up business, which was by far the top selection of several choices provided.
The other top reasons women business owners do not pursue financing are a belief that they would not qualify for credit (25.9 percent) and the perception that the credit process is too difficult or cumbersome (20.4 percent).
Another significant finding to emerge from the National City survey is that the frequency of contact by their financial institution is very important to women entrepreneurs. More than half of the women surveyed said they prefer that their bank contact them at least twice a year. The women surveyed want to know about the new products and services that meet their business needs. They also want to build a relationship with their financial institution and have frequent contact, whether it is in person, by phone, e-mail or regular mail.
"We cannot emphasize enough the significance of women business owners," said Peter Raskind, Executive Vice President, Consumer and Small Business Financial Services for National City Corporation, which lent almost $550 million to women small business owners in 2003. "Women-owned businesses are a critical component of the economy, not only in terms of their influence, but also in terms of their economic impact. As an industry, we must communicate to this market all available financing options to start and grow a small business."
Linda Stevenson, Vice President, Director of National City's Women Business Owner Initiatives, said, "The financial services industry in the U.S. must continue to aggressively assist women entrepreneurs. The support needs to include enhanced education, increased access to capital, and a concerted effort toward networking and relationship building - we need to work harder at encouraging women business owners to apply for credit instead of them thinking they are not worthy of it. The credit process is simpler than they realize."