The continued challenges Female Business Owners face in 2024

In the landscape of modern entrepreneurship, women are increasingly stepping into leadership roles, driving innovation, and shaping the future for hundreds of UK industries.

However, despite their remarkable contributions, female business owners continue to encounter a myriad of challenges when building their businesses, particularly in securing the funding necessary to grow their ventures.

In the UK, where over one million businesses are led by women, accessing finance remains a significant hurdle. We take a look at the continued challenges that female business owners face in 2024.

Gender Bias and Stereotypes: Breaking the Mould

One of the enduring challenges faced by women entrepreneurs is navigating through gender bias and stereotypes prevalent in the business world. In male-dominated environments, women often find themselves battling against preconceived notions and unequal opportunities. The pressure to conform to existing attitudes can lead to feelings of being undermined and undervalued.

An all too familiar story.

The conversation on inequality is now far more prevalent than it was 20 years ago.

Businesses are recognising that things need to change. 'Male-Allies' is the new buzzword for corporates looking to tick the equality box.

But the reality is that while female business leaders emphasise the importance of authenticity, confidence and staying true to themselves to tackle and overcome these challenges - 1 in 3 female entrepreneurs say they have experienced sexism or inequality as a business owner.

What's being done?

As you would expect the charge is being led by female entrepreneurial peer groups.

Somi Arian, founder of InPeak, commented in the recently released International Women's Day 2024: Female Founders and How To “Invest” in Women article that "your network is your net worth”; with InPeak fostering an environment where female founders can connect by offering tools and resources that empower women to expand their networks, through targeted forums, specialised content, and networking events.

The Future Female Entrepreneur (FFE) was launched by Two Chicks Founders Alla Ouvarova and Anna Richey aims to inspire the next generation of female entrepreneurs and to help ensure that more UK businesses are created and led by women.

The UK Business Angels Association is championing female entrepreneurs through their ‘Women Backing Women’ initiative that started in 2018, targeting a pool of female angel investors representing 30% of the total number of UK angels and getting 1m Women Entrepreneurs Funded by 2030.

And there is The InvestHer Summit in June this year, taking place in Dublin, is a Global Action Summit for women founders, investors, corporates & policymakers focused on closing the funding gap for women entrepreneurs.

Building a supportive network of peers and mentors who understand the challenges faced by women in business will help show support, and there are a lot of initiatives out there built by the founders who have experienced the void that exists.

But there is a need for the broader business landscape to step up and improve their game when it comes to solving the issues in improving access to financing for female founders and supporting the women-led small business ecosystem.

Accessing Funding: Breaking the Glass Ceiling

The importance of securing funding as a pivotal step for any business is undeniable, yet women-owned businesses often face greater difficulty in this area.

The fundraising statistics for female founders rarely fall in their favour, with systematic gender bias in the investment ecosystem and a shortage of female investors and funding networks just some of the many hurdles attributed to the funding gap.

Angel investors are often fundamental to an entrepreneur’s growth journey, bringing funding, invaluable business support and connections. And this should continue to be supported by bringing together more female founders with those working in finance or funding.

But what's the alternative?

Traditional money lending methods continue to follow the conventional practices of favouring financing business owned by men.

Several small lenders are now acknowledging the under representation and difficulty faced by female entrepreneurs, offering better interest rates, and loan terms for female borrowers for loans in the £1-500k space.

But debt lenders are still being asked to take greater strides to better support female business owners and ensure gender discrimination (conscious or unconscious) is not a consideration when reviewing a loan application.

Moving Forward: Bridging the Gap

As we continue to work towards a more inclusive and equitable future, and some progress has been made in addressing the challenges faced by female business owners, there is still much work to be done.

Collecting and reporting data on gender and ethnicity in finance is crucial for tracking progress and identifying areas for improvement. Initiatives like the Investing in Women Code are instrumental in increasing transparency and accountability in funding decisions.

To truly address the systemic barriers faced by underrepresented entrepreneurs, a concerted effort is needed to incorporate a wider range of perspectives in finance decision-making.

What is clear is that women are a key growth engine of UK SMEs but continue to face inequality when it comes to finding funding support.

SME Capital is committed to backing women in business, making sure gender is never a consideration when we speak to businesses about funding. SME Capital is focused on lending to great businesses and business owners who have the skills, experience, and resilience, and who are supported by a solid management team.

If you are a female business owner and would like to discuss funding options for your business, please feel free to get in touch.

About SME Capital

SME Capital was founded to support the growing number of SMEs who face difficulty or frustration in accessing capital through traditional methods.

We understand the importance of real and trusted relationships in the SME lending market and have dedicated Regional Directors based across the UK with the operations and marketing support function led by COO, Kate Kennedy.

By combining traditional lending expertise with the latest in data analytics, we are supporting established UK SMEs with their long-term objectives and business ambitions.

Navigating the Financing Maze: The Continued Challenges for Female Business Owners in 2024