NAWBO thanks Bank of America for once again serving as the presenting sponsor of our National Women’s Business Conference!
By Jill Calabrese Bain, Managing Director,
Head of Small Business Merchant Services, Bank of America
Thirty years ago, it was the law in many states that a woman applying for a business loan needed the guarantee of a male cosigner—be it a father, a brother, a son or a friend. Then came passage of the landmark Women’s Business Ownership Act (H.R. 5050) on October 26, 1988. This game-changing legislation did away with the rule and paved the way for more women to pursue entrepreneurship, and as a result, drive significant growth in the U.S. small business sector.
It is therefore fitting that we recognize October as National Women’s Small Business Month—a time to celebrate the contributions and successes of women entrepreneurs; to recognize their perspectives, ideas and values as business leaders; and to reflect on the unfinished, ongoing journey toward equal opportunity for women in business and beyond.
Since 2016, Bank of America has conducted an annual study exploring the aspirations, challenges and everyday experiences of women entrepreneurs across the country. This year, we see women entrepreneurs are increasingly confident about the overall business environment and their own outlook for growth. Confidence in the economy is at a two-year high, and the number of women expecting their revenue to increase in the year ahead has soared by 14 percentage points—from 44 percent of women entrepreneurs in 2017, to 58 percent in 2018.
While many factors may be contributing to the growth and increased confidence of women entrepreneurs, our research revealed several interesting trends.
Progress on access to capital, despite continuing disparity
One potential contributor to women entrepreneurs’ positive outlook is their opinion that conditions for women business owners to start up and succeed have improved. Eighty-four percent of our survey respondents said they believe access to capital for women entrepreneurs has improved over the last decade.
While the prevailing perception on the trend is positive, women business owners also sense that a gender disparity still persists. Sixty-eight percent say they face greater challenges than their male counterparts in accessing capital, and 61 percent say it was more difficult for them to get their business off the ground than it was for male business owners they know.
When asked to choose one factor that could have an equalizing impact on access to capital, 42 percent of respondents pinpointed gender-blind financing (where the gender of an applicant seeking investment or financing is not known).
Leading the digital transformation
An exciting area of leadership for women business owners that portends their continued rise is the embrace of technologies that are transforming the business landscape. As digital tools and innovations become more integrated into our lives, our survey found women entrepreneurs hold an edge over their male counterparts, leveraging mobile technologies in their business at higher rates.
Thirty-three percent report using a mobile device to process digital financial transactions compared to 26 percent of men. Of those conducting financial transactions on mobile devices, women lead men on accepting mobile payments from customers, issuing refunds and paying employees.
Thirty years of progress and a promising future
In 1987—the year before H.R. 5050 was signed into law—4.1 million women-owned firms in the U.S. were generating $278.1 billion in sales and employing more than 3.1 million individuals (Source: 1987 U.S. Economic Census). In the 30 years since, the growth of women-owned businesses has been meteoric, and their economic contributions are indisputable. According to the most recent U.S. Small Business Administration data, women own more than 12.2 million businesses (up 197 percent from 1987), generating more than $2.4 trillion in sales (up 763 percent from 1987) and employing more than 14.8 million individuals (up 377 percent from 1987).
The future continues to get brighter
When we asked women business owners about the 20-year outlook, a majority said they expect women will achieve pay equity with men and will match or exceed them in executive leadership or C-suite roles, STEM field representation and small business ownership in the next two decades. In addition to these advances, women small business owners also foresee a larger government role in adopting paid parental leave—a policy that would help make the birth of a child more manageable for all families.
As we celebrate National Women’s Small Business Month and the 30th anniversary of H.R. 5050, we are reminded of the importance to maintain momentum in ensuring women entrepreneurs have the resources and opportunities to bring their talents to the table—because doing so drives greater innovation, expands choice for consumers, employs more people, propels economic growth and enriches communities and lives.