Women business owners in Oklahoma reach new heights in capital

Journal Record, The (Oklahoma City), Apr 19, 2005 by Lea Terry

More women business owners are accessing capital than ever before, according to a study by Wells Fargo and the Center for Women's Business Research. Despite this progress, women still lag behind men in the use of both commercial credit and loans.

The study analyzed the availability and use of capital by women business owners and showed that an increasing number of women are turning to credit providers and lending institutions for funding. The increase is likely due to changes in how women approach business and in how financial institutions view women-owned businesses, said Julane Borth, co-founder of EWF International, an Oklahoma City- based forum for women executives.

Women entrepreneurs are becoming more sophisticated, Borth said. And I think that lending institutions are recognizing what's really happening in the women business owner market - they're recognizing the viability of women business owners.

According to the report, the amount of women business owners using commercial credit increased from 20 percent in 1996 to 34 percent in 2003. The increase was even more significant among larger businesses, with 56 percent of women-owned companies with revenues of $1 million or more using commercial credit in 2003.

I think they are beginning to see the difference between personal credit and business credit, Borth said. Rather than seeing all credit in the negative, they're beginning to make the distinction that having a line of credit for their business is a good thing, even if it may be different than what they want to do personally.

While there has been significant progress, the study found that women still rank behind men in the use of commercial credit and loans.

According to the report, 71 percent of male-owned businesses use commercial credit, and they also receive a greater share of loan money.

The gap may stem in part from women's hesitancy to depend on outside funding for their businesses, Borth said. Fearing debt and wishing greater independence, most women prefer to direct earnings back into their businesses, rather than seek assistance from outside sources.

They are more used to using revenues from their business, Borth said. They rely on their business earnings as their primary funding source, so they want to make their money and then use that to fund growth.

However, as women become more educated about credit and loans, and as they see the success other women have had, Borth said they will probably be more willing to accept outside funding.

In addition, more financial institutions are reaching out to women business owners, which may make obtaining funding an easier and more realistic option for many women, Borth said.

In fact, Borth said, lenders are now recognizing that women- owned businesses could be some of their most valuable customers.

Lending institutions are now looking at the numbers, and the increase in women-owned businesses is really growing much faster than in the male businesses, she said. I think that's being recognized.

Lea Terry is an Oklahoma City-based free-lance writer.