In California small businesses are the fastest-growing segment of the economy, employing nearly half of the state’s workforce, but they continue to have the hardest time accessing capital. Between 2007 and 2016, the number of women-owned businesses in the U.S. grew five times faster than the national average. During this time, Latina businesses grew by 137 percent.
Women who own small businesses drive economic expansion in their communities and create better lives for themselves and their families. We see this in action every day here in the Central Valley.
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However, women business owners have the hardest time getting capital from traditional lenders to grow and scale their enterprises, hire employees, and buy or lease equipment. Women-owned businesses account for 39 percent of all U.S. firms but receive only 16 percent of all traditional business loans and only 4 percent of all dollars lent. Barriers to accessing responsible capital for the fastest-growing segment – women-owned businesses – limit economic growth, social mobility and opportunities for families and communities.
These dynamics are amplified in the central San Joaquin Valley where many of women-owned businesses are Latina-owned. Being a woman and a Hispanic puts these women in all the more tough position to access needed capital.Barriers to traditional lending include limited credit history, limited assets, smaller dollar credit needs, and unfamiliarity with the system.
To support women-owned businesses, the Fresno Area Hispanic Foundation, in collaboration with Opportunity Fund, are partnering on a campaign – Opportunity Fund Empowering Women, ofew.org. Our partnership aims to lend to more women small business owners and connect them with the foundation’s business advisers and mentors so they can achieve long-term success. The need is great, as is the pent-up demand evidenced by the 35 to 40 Latina business owners who regularly attend the biweekly meetings of the small business mentoring program, Mujeres Hablando de Business (Women Talking about Business), presented by FAHF with the Fresno Mexican Consulate. At a recent meeting, we focused on access to capital, the pitfalls to avoid predatory lending offers, and why women business owners shouldn't be discouraged when they are turned down for traditional loans.
We have worked with thousands of women business owners and seen firsthand their vision, determination and commitment and how, when supported in their success, they can achieve their dreams, provide for their families and contribute to the economic well-being of their communities. From our experience lending to thousands of women-owned businesses, we know that women’s personal experience, character and drive are often more accurate predictors of future success beyond focusing only on loan applications and credit scores – which are often the only two criteria used to evaluate their creditworthiness.
We need to focus on creating economic equality and opportunity for women who have demonstrated they have what it takes to strengthen our society. We at the Fresno Area Hispanic Foundation and Opportunity Fund know that giving businesswomen the resources and tools they need to grow – affordable, transparent capital along with technical assistance – is good for families, strengthening communities and enhancing economic growth.
Dora Westerlund is executive director of Fresno Area Hispanic Foundation, which promotes entrepreneurship as a means towards economic self-sufficiency. Luz Urrutia is CEO of Opportunity Fund, the largest nonprofit lender to small business in California and national leader for the microfinance movement.