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Women business owners face gender gap, report says

Published on NewsOK Modified: July 23, 2014 at 6:22 am •  Published: July 23, 2014
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NEW YORK (AP) — Women who own small business are still far behind their male counterparts when it comes to getting loans and government contracts, a congressional report said Wednesday.

The report by Democratic staffers of the Senate Small Business & Entrepreneurship Committee found that while businesses owned by women account for 30 percent of small companies, they receive only 4.4 percent of the total dollars in conventional small-business loans. That amounts to $1 for every $23 loaned.

In terms of numbers of loans, businesses owned by women receive only 16 percent of all conventional small-business loans, and 17 percent of loans backed by the Small Business Administration. Their loan applications are more likely to be rejected than those from businesses owned by men, and the loans they get are likely to have more stringent terms.

Women also receive only 7 percent of venture-capital funding.

"The numbers are jarring, for sure, and we need to own up to the fact that we want to see more women entrepreneurs, and to make sure they're getting access to capital," Committee Chair Maria Cantwell, D-Wash., told The Associated Press.

Women are also falling short in receiving government contracts. Although Congress in 1994 set a governmentwide goal of awarding 5 percent of federal contract dollars to small businesses owned by women, it hasn't met that goal. The closest it has come is 4 percent, in the fiscal year that ended Sept. 30, 2012, the report said. Failing to meet the goal costs women-owned businesses nearly $5.7 billion in government contracts each year, it said.

Congress needs to take steps to help women-owned businesses, including making changes to the SBA's microloan program aimed at helping companies borrow up to $50,000, the report said. It also called for the reauthorization of what's known as the Intermediary Lending Program, which allows business owners to borrow between $50,000 and $200,000.

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