Women Entrepreneurs Report Discrimination : Bias: A congressional panel heard testimony that it is often hard to obtain credit and secure their fair share of private and public contracts.
Although women are starting businesses 1 1/2 times as fast as men and are growing in influence, many women business owners still believe that they are being held back by discrimination in an arena dominated by men.
Women entrepreneurs from around the state told a congressional investigative panel Tuesday that one of the obstacles they face is that commercial loan officers, predominately male, are wary of lending to women entrepreneurs. Bankers also are under increasing pressure from regulators to be conservative in their lending practices.
Their testimony came at an all-day hearing by the National Women’s Business Council in Century City. The council, chaired by Small Business Administration Chief Susan Engeleiter, was meeting for the second time since its creation in 1988.
Engeleiter said women consistently have difficulty obtaining credit and securing their fair share of private and public contracts.
Several women said they also face obstacles in obtaining public and private sector contracts because most procurement officers are men who prefer to do business with established, male-owned firms.
“Men must realize that when they deal with women business owners they are not participating in a social revolution, but in a vital part of the economy,” said Margaret Smith, a Los Altos attorney who represents dozens of women business owners in the Silicon Valley.
Smith, whose clients collectively employ 1,000 people and generate revenues in excess of $150 million, said most women business owners do not “view government-sponsored programs as feasible financial alternatives.”
Despite the obstacles, the SBA’s Engeleiter said California leads the nation in SBA loan volume. Last year, the SBA issued about $148 million worth of loan guarantees in the Los Angeles region alone. There are about 15 banks in the region considered preferred or certified SBA lenders, although any bank may accept a SBA loan guarantee, she said.
Among the women testifying was Romana Acosta Banuelos, the first Latina to serve as treasurer of the United States. Banuelos, who was appointed by President Richard Nixon in 1971, currently serves as chairman, chief executive and president of Pan American Bank.
She told the panel that she remembers being turned down for her first home loan because she was divorced. She later founded a successful family owned tortilla business that now generates about $15 million in revenue each year.
“When we started the bank, we were told we had no background in banking and told we would fail,” said Banuelos, whose bank employs 55 at branches in Los Angeles, Whittier and Santa Ana.
The nine-member National Women’s Business Council was created by the Women’s Business Ownership Act of 1988. Its chair is appointed by the President. Other representatives are designated by the Small Business Administration, the Federal Reserve Board and the Department of Commerce. The six remaining members are appointed by congressional representatives.
NEXT STEP
The National Women’s Business Council, created by an act of Congress in 1988, heads to Chicago and Little Rock in the fall to continue hearings on barriers to women in business. Each year, the council must report its findings and make recommendations to Congress.
