Nearly 80 per cent of women business owners in B.C. will need funding for their business over the next two years; yet, 61 per cent feel that current funding models don’t fit their needs. This, according to a new report released by Women’s Enterprise Centre on March 5: “The Path Forward: Advancing the Funding Journeys of BC Women Business Owners.”
Women’s Enterprise Centre is a non-profit organization that has provided support and capital for BC women business owners for over 25 years. In 2020, they received funding from Western Economic Diversification Canada to conduct research into the funding experiences of women prior to March 2020, during the pandemic and their anticipated needs for the future. Over 400 women entrepreneurs responded to the survey, which circulated in November 2020.
“Our intentions are to understand the challenges faced by women as a result of the pandemic, highlight the opportunities that come with funding their business startup, recovery or growth, then provide actionable recommendations for ecosystem funders and champions to close the gap in access,” said Jill Earthy, CEO of Women’s Enterprise Centre, in a news release. “In this report, we explore each step of the process – from marketing to funding models, applications, approval rates and support. Change doesn’t happen overnight, but we hope this framework will serve as the basis for long-term change in the BC funding landscape.”
While women have traditionally been characterized as reluctant borrowers, who are either risk-averse or resistant to growth, this study finds that is not the case. Instead, many choose a more intentional and informed path, accessing smaller amounts of capital over time. This may trigger a higher risk profile up front, but women-founded startups are shown to perform better over time, and deliver more than two times per dollar invested.
Yet, current funding models have been slow or incomplete in their response to women’s funding needs. As one respondent shares: “The gig work economy in Canada is enormous and organizations providing funding need to think more about how businesses are being run rather than how businesses have been run in the past, when developing their eligibility requirements.”
The report includes key recommendations for funders, financial institutions and organizations to support the unique needs of BC women business owners on their path to entrepreneurial success. Tips include developing funding models that go beyond marketing, simplifying the application process, lowering eligibility criteria and partnering with organizations to offer long-term support. As an example of funding reform, the report shares a spotlight on the Unity Women Entrepreneurs Program, a collaborative pilot project developed by Vancity and Women’s Enterprise Centre.
This report is coming out at a time when women business owners are experiencing a disproportionate impact as a result of the COVID-19, and recent studies have shown that the pandemic is eroding some of the progress that has been made in recent years, to advance women’s entrepreneurship in Canada.
“As we look towards economic recovery, funding will play a critical role. Ninety-one percent of respondents say they’re optimistic about the future, and 77% plan to seek funding to accomplish their goals,” says Earthy. “The need is there, and we have a unique opportunity to redesign the funding landscape so we can develop a stronger pipeline of diverse and thriving businesses.”
WEC recognizes the unique pathways taken by women entrepreneurs. BC women business owners can contact WEC to access business loans of up to $150,000, that include wrap-around services like complimentary access to a Business Advisor, mentorship, training and promotional opportunities.
The full report is available at wec.ca/ThePathForward.
Key report findings
- 63% of women business owners request less than $50,000.
- 60% of survey respondents did not apply for funding pre-pandemic; many women thought they would get turned down.
- 63% of women business owners experienced revenue decline as a result of the pandemic; of those, 43% were forced to temporarily close their business, and 12% directly related to lack of childcare.
- Over 60% of women have accessed business advisors, online education or mentorship since the pandemic, the majority of which have approached non-profit organizations for support.
- 91% of women business owners are optimistic about the future.
- 77% of those surveyed anticipate needing funding in the near future but 61% say current funding doesn’t fit their needs.
- Over 40% of women business owners suggest a simplified application form and say advisory support through the process could improve the experience.
- Since 1995, Women’s Enterprise Centre has provided over $72.8 million in direct and leveraged financing to women businesses owners, and has created over $2.18 Billion in economic activity in the province since 1995, which helped create or maintain over 3378 jobs in the province (as of March 31, 2020). Their loan repayment rate is 96% and, due to proactive concessions made for loan clients early on, none have defaulted as a result of the pandemic to date.
- 75% of WEC-Funded businesses are still in business past five years, compared to the national average of 65%.