How women can conquer the capital conundrum

 Leslie Yoest, The Daily Record Newswire

It’s a sobering statistic: Men start their businesses with nearly twice as much capital as women, and lack of access to capital is blamed for preventing the growth of women-owned small businesses, according to a recent study by the National Women’s Business Council.

In addition, the report found that too many women underestimate themselves and their business’ growth potential even though the data confirms that they are more likely than their male counterparts to see growth.

Why are these findings significant? A 2012 report from the Global Entrepreneurship Monitor puts it bluntly: If women are not actively engaged as entrepreneurs, the job creation capacity of half the world’s population is lost.

We must continue to educate women to give them both the confidence and the financial backing they need to grow their business and keep our economy moving forward. Fortunately, there are myriad resources in our community that provide tangible and intangible assistance.

Preparation is key. The first step in gaining access to capital is preparation. Women need to approach lenders fully prepared and educated on their goals, with a genuine business plan that is well-researched and thoroughly written. For new entrepreneurs in need of assistance with this step, a wealth of resources are available.

Ask your banker if their institution offers resources specifically targeted to women entrepreneurs, or if they can provide a referral. The Idaho Women’s Business Center offers one-on-one guidance and training, with a focus on women who are economically disadvantaged or have been historically under-represented or excluded. The WBC can also provide language translation services. The Small Business Development Center and SCORE are additional sources of support.

SBA programs available. A recent development that has improved access to capital for women entrepreneurs is the U.S. Small Business Administration’s elimination of the personal resource test for 7(a) loans. Previously, the personal resource test adversely affected legitimate small businesses who had received outside support — from venture capital, an angel investor or a family member.

Many times, the personal resource test stood in the way of a local business getting access to capital to start to expand their business. Take the woman entrepreneur who owns a large drilling and excavation company but was declined for an SBA loan because her investor’s personal net worth was too high. With the rule change, the investor’s personal resources no longer play into the SBA’s criteria, and she has obtained an SBA loan with her investor as a guarantor.

These improvements apply to SBA Export loans as well as Patriot loans for veterans and military families. The change also eliminates a time-consuming step in the application process, enabling lenders of all sizes to improve the efficiency of their SBA loan product delivery.

Women entrepreneurs should also consider the SBA’s 8(a) Business Development Program, which helps small, disadvantaged businesses compete in the marketplace. An Idaho-based, woman-owned specialized construction company is benefiting from the program, which allows participants to receive sole-source federal government contracts, up to $4 million for goods and services and $6.5 million for manufacturing.

Let’s close with a more encouraging statistic: Women-owned firms in Idaho have grown almost 50 percent since 1997 and sales have increased almost 90 percent during the same period, according to the American Express OPEN’s 2013 State of Women-Owned Businesses Report. The same study ranks Idaho as No. 10 for economic clout, which averages together the rankings of growth in the number, revenues and employment of women-owned firms.

But our work isn’t done. With support of community business partners, government programs and lenders, women can continue to grow their businesses and create jobs and economic prosperity in the Gem State.


Leslie Yoest is vice president and manager of Zions Bank’s Women’s Financial Group in Idaho, providing financial expertise, resources and connections to women entrepreneurs in the Gem State.