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Good News For Female Entrepreneurs: Gender Gap In Lending Narrows, But It's Far From Gone

This article is more than 9 years old.

A new survey from Biz2Credit, an online credit marketplace, found some good news for female entrepreneurs: the average annual revenue and loan approval rates are way up for women-owned businesses. Biz2Credit analyzed more than 15,000 applications from business owners on its platform in 2014 and found that average annual revenue of women-owned businesses jumped 40%, to $127,222 in 2014, from $91,488 in 2013.

The company reports that 35% more women-owned companies sought funding on its platform in 2014 than 2013, yet approval rates for those businesses were 29% lower than the approval rate for male-owned businesses.  (Biz2Credit has arranged more than $1.2 billion in  funding for small businesses since 2007.)

And male-owned businesses still generate more revenue than female-owned businesses. The survey found that businesses owned by men generated about 50% more revenue, on average, than those owned by women. And the average earnings for male-owned businesses were 55% higher than for companies owned by women.

The research shows that despite increased profitability, there’s still a very real gender gap in business lending and revenue generation.  The uptick in revenue and loan applications is generally credited to improved economic conditions, although plenty of business owners—chastened after the financial crisis and ensuing credit crunch—are leery of loans. National Federation of Independent Business’ chief economist Bill Dunkelberg told CNBC last month that the organization found more than half of small business owners say they aren’t interested in obtaining a loan. Many are increasingly tapping alternatives to traditional financing.

The survey also found credit scores for women-owned companies dropped slightly below 600 in 2014, down from 610 in 2013. Average credit scores for businesses owned by men were 15 points higher in 2014 (although they dropped from 630-615 from 2013 to 2014).