International Women’s Day: Half of women setting up in business thwarted by funding hurdle
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Limited access to funding is cited as the top roadblock in the survey of almost 2,000 people by Tide, the business financial platform, while around a fifth of women listed gender as a barrier to successfully launching a business. Recent figures show that all-female-led companies accounted for a record 20 per cent of all new businesses created in the UK in 2022, up from 16 per cent in 2018. Despite this, the process of starting a business remains difficult for many women, according to the Tide research.
The study, which comes ahead of International Women’s Day this Wednesday, shows clear variations among women from different ethnic minorities. Some 68 per cent of black female business owners found the process of launching a new venture hard. According to the survey they are 20 per cent more likely to find it challenging than their white and Indian counterparts. Regionally, women based in Scotland, Northern Ireland and the north east of England find it the toughest to start a business.
More than half (54 per cent) of women say limited access to finance is the top roadblock to launching a business. In fact, half of female business owners applying for a loan or investment to fund their new business are rejected, according to Tide’s poll of members.
The survey results came as the firm announced that it has exceeded its target, ten months ahead of schedule, to help 100,000 female-led UK businesses start out by the end of 2023. As of March 2023, Tide has welcomed some 110,000 women to its platform, making up 25 per cent of its total members. It plans to announce a new commitment in the UK later this year aimed at supporting more women to launch their own businesses.
Heather Cobb, who works on member engagement at Tide, said: “Meeting our target to onboard 100,000 female-led businesses in the UK by the end of 2023, almost a year early, is a great achievement and one we’re very proud of. It’s a testament to our desire to support more women into entrepreneurship - we believe gender should not be a barrier to starting your own business. However, as highlighted in our survey, there’s still a long way to go in making it easier for women to do this including tackling hurdles on funding and mentorship. By listening closely, we’re working to provide further support to help all our members expand their networks, improve their operational know-how, secure finance and reach their full potential as successful SMEs [small and medium-sized enterprises].”
Reacting to the study’s findings, Leah Hutcheon, chief executive of Scottish booking and scheduling platform Appointedd, said: “It's so sad to see the stats around women continuing to struggle to raise capital. Appointedd has raised £2.7 million in equity investment, and we’ve been lucky enough to be supported by a diverse range of investors, but unfortunately our story is definitely in the minority.”