A study by Bibby Financial Services (BFS) has highlighted a gender gap in commercial lending to small and medium-sized enterprises (SMEs), with women business leaders reporting greater challenges in securing finance. 

According to the latest SME Confidence Tracker from BFS, two-thirds of women business leaders feel that high-street lenders are less willing to provide loans to women-led enterprises.

BFS’ survey, which included responses from 1,000 UK SMEs, found 57% of women business leaders opining it has become more difficult to access external finance compared to six months ago. 

In the context of rising corporate insolvencies, which have reached a 30-year high in England and Wales in 2023, the BFS data shows that more than half of SMEs (54%) overall have faced the insolvency of a supplier in the past six months.  

Furthermore, 51% have witnessed customer failures.  

However, data from Female Founder Finance and mnAi indicates a lower rate of administration among women-founded companies at 2.9%, in contrast to 14% for male-owned businesses in 2023.  

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The BFS survey, which included 450 women SME owners and decision-makers, identified interest rates, energy costs, and cash flow as the primary concerns for their businesses.  

Besides, 60% of women entrepreneurs feel that the current economic conditions are stifling entrepreneurial spirit, a sentiment shared by 53% of male business owners. 

BFS chief strategic development officer Lucile Flamand said: “According to the Rose Review, £250bn in value could be added to the UK economy if women matched the number of men starting and scaling a business, and a critical dependency of this is being able to access finance.  

“With many high street sources re-appraising their risk appetite for SME lending owing to rising insolvencies in the past year, systemic bias could be intensifying the issue for women-led enterprises, despite data showing that women-led businesses are less likely to face administration.” 

The findings also shed light on the sectoral differences within the UK’s SME community.  

Service-sector firms constitute a third of women-led businesses, whereas they represent only 13% of those owned by men. 

Flamand added: “While recent initiatives, such as the government’s Women-led High-Growth Enterprise Taskforce, which aims to create £250m in funding for female founders must be applauded, it is only the start.  

“We first need to recognise gender imbalance in accessing finance as a lost opportunity for the economy, and then take tangible action to improve educational resources and support for women business owners, and ultimately to challenge inbuilt and unconscious bias in financing and investment.” 

The UK Treasury Committee expressed concern earlier this month about the harder conditions for SMEs trying to get financing.