Survey: Women-Owned Small Businesses are Growing; but Face Financial Challenges

A comprehensive survey from the Federal Reserve Banks of New York and Kansas examines successes among female entrepreneurs and reasons for the continuing gender gap.

12/6/2017 10:00 AM

Survey: Women-Owned Small Businesses are Growing; but Face Financial Challenges

Small businesses, including those owned by women, are becoming a critical part of the U.S. economy, however findings from a recent survey show they still face some growing pains.

The number of women-owned firms in the U.S. is growing at a faster rate compared to firms owned by their male counterparts, but they also face some financial and operational challenges, according to the 2016 Small Business Credit Survey: Report on Women-Owned Firms from the Federal Reserve Banks of New York and Kansas.

“Women-owned businesses are a critical part of the small business sector, yet it’s well-known that they have historically struggled with lower growth rates. More needs to be done to understand why,” Claire Kramer Mills, New York Fed assistant vice president and community affairs officer, said in a news release. “This report advances our understanding of the causes and implications of this gender gap, which can inform efforts to help high-potential women-owned firms meet their financing needs and flourish.”

The credit and collection industry is made up of primarily small businesses and has a growing workforce of women who work at or own those companies.

Women make up 70 percent of the total debt collection workforce, according to the ACA International white paper “Small Businesses in the Collection Industry: An Overview of Collection Size and Employment.”

Women-owned firms in the Fed survey are defined as 51 percent or more ownership by women and employees in 2016.

The Fed also reports that, according to the U.S. Census Bureau, employment by women-owned firms jumped by approximately 20 percent between 2007 and 2015, while at the same time the percentage of employment by all small businesses decreased by about 4 percent.

Key findings from the survey reflect a growing presence of women-owned firms and their contribution to the economy while they still face financial challenges and growth restrictions. There were more than one million women-owned firms as of 2015 and they accounted for over 20 percent of all U.S. firms, according to the survey.

Among the findings:

  • Women-owned firms are more likely to remain small in terms of their profits and staff; for example, 22 percent brought in at least $1 million in annual revenues in 2016, compared to 36 percent of men-owned companies.
  • Women-owned firms are more likely to have financial challenges and growth restrictions than their male counterparts, especially when just starting out. Fifty-three percent of women-owned firms had medium/high credit risk early on compared to 40 percent men-owned firms. However, the differences balance out over time. Among firms in business for six or more years, 33 percent owned by women had medium/high credit risk compared to 29 percent owned by men.
  • Firms owned by women have fewer types of debt and equity than men-owned firms and rely primarily on credit cards and financing products from the U.S. Small Business Administration.

“The number of women-owned firms is growing significantly faster than their male-owned peers, however, they face different sets of challenges in terms of operating and growing,” Dell Gines, senior community affairs advisor at the Kansas City Fed, said in the news release. “This report shares key insights into the credit needs and challenges of this growing group of entrepreneurs.”

The complete report is available on the New York Federal Reserve’s website

Are you part of this workforce in the credit and collection industry? Share your experiences with ACA International by emailing our Communications Department at or on Twitter or Facebook.

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