Female Business Owners, Credit Woes Studied

Female owners of “fast-growth” businesses invest more in their companies and borrow more heavily than female owners of slower-growing companies, a survey to be released today found, but they are still less likely than their male counterparts to get commercial business loans.

The National Foundation for Women Business Owners surveyed 1,194 entrepreneurs--602 women and 592 men--including “fast-growth” firms achieving revenue or employee growth of 30% or more over the last three years.

The results show that women, who own 38% of U.S. businesses, need better training and access to credit and investment capital, said Sharon Hadary, executive director of the nonprofit research institute.

“Even the women in high-growth businesses are still relying on personal credit, and that puts their own assets at risk when there’s no need to do that,” Hadary said.

The study found that 39% of women who own fast-growth firms have a commercial bank loan, compared with 52% of male owners of similar companies. It also showed that 32% of female owners of fast-growth firms use personal credit cards to finance their firms, compared with 21% of men.

Victoria Lowe, who founded the Culver City-based Alert Staffing agency five years ago from her home and has built it to $200 million in annual revenue, can confirm the study’s findings.

“I maxed out every credit card I had in the beginning, and we still struggle with traditional funding,” Lowe said. “We’ve approached several traditional funders and have been turned down because of various stumbling blocks: lack of a track record, not having enough assets in the company. Every time we go back to a bank, there seems to be a new obstacle.”

Among additional findings:

* Most female entrepreneurs with fast-growing companies have a greater diversity of business and life experiences than male business owners, and are less likely to have had an entrepreneurial role model.

* Female owners of fast-growing businesses are more likely to consult outside sources on business management and growth issues.