New research from Access Commercial Finance unveils the ugly truth that the gender funding gap is still alive and kicking among UK SMEs
There are a lot of awesome female founders in Britain. From Wendy Tan White building Moonfruit into a huge success story to Samantha Payne turning child amputees into superheroes with Open Bionics, whoever still argues that women can’t make it as business leaders better eat up their copy of James Damore’s manifesto. Unfortunately, a new study has shown that there’s still work to be done before female founders can compete on equal terms to men.
Having looked at over 800 startup funding applications from 2016, Access Commercial Finance, the commercial finance provider, found that female founders received just 44p for every £1 awarded to men. On average, female founders received £22,162 each while guys received £50,638 per founder.
And that’s despite women having an 18% higher approval rate than men. Of the applications sent by women, 13% were successful, compared to 11% from men.
Looking at the reasons behind the disparity, analysts at the company found that female entrepreneurs on average asked for £18,000 less than their male peers. Another reason was men applied for funding more often than women. Of the analysed applications, 135 came from women and 698 from men. In total, men received £4,051,052 in funding while women received £332,437.
Commenting on the research, Matt Haycox, consultant at Access Commercial Finance, said: “This data shows us that women are on average either better at putting together a funding proposal for their small businesses or they just have more fundable businesses. Either way, it’s potentially good news for women-owned businesses and startups. But given the low application rate and low funding request amount for women, men are still getting most of the cash due to sheer volume of applications. We hope our data gives any woman considering applying for business funding the confidence to do so.”
While it’s disheartening to see the funding gap between the two sexes being demonstrated so blatantly, we’re hoping that more women will heed Haycox’s words of encouragement.