Everyone loses: why can’t female entrepreneurs secure funding?

Female entrepreneurs are finding it harder than ever to access the capital they need to succeed in business. Meanwhile, the window for traditional lenders to take advantage of this unmet demand is closing amid the rise of new funding methods.

" The Australian banking industry is meant to be one of the most sophisticated in the world but it is not effectively servicing half the population."
Cynthia Balogh, National Program Manager, Women in Global Business, Austrade

Women establish businesses at twice the rate of men in Australia and data shows even when these businesses are under five years old a large proportion are already expanding internationally. Embracing these global opportunities requires funds – which these businesses are not getting from banks and other traditional sources of finance.

In 2015 Women in Global Business (WIGB) and the University of Melbourne surveyed 416 Australian businesswomen, including 183 self-identified entrepreneurs. Fifty five per cent of those surveyed rated accessing finance as difficult or very difficult. Astonishingly, only 10 per cent of those surveyed said their primary source of capital was bank loans.

The problem is getting worse. Fifty two per cent of the entrepreneurs surveyed said a lack of alternative sources of capital was a greater barrier to international expansion in 2015 than it had been 12 months earlier. Just over one-fifth of internationalised businesses attempted to borrow to fund an international expansion, with only 27 per cent of those successful.

Banks are only playing a minor financing role. A change in approach is required or more of these entrepreneurs will be forced to find financing outside traditional areas. The rise of crowdfunding provides a genuine alternative but Asian lenders are also lining up to take advantage of this market failure. This latter option increases the operational risk for borrowing businesses when they involve themselves with the laws and regulations of foreign markets.

According to the WIGB research, current funding for these female entrepreneurs is mostly procured through personal savings, family and friends and reinvested profits. Some even look to credit which at high interest rates is not a sound business decision.

What all these forms of funding have in common is that they are generally limited in scope. As a consequence the international growth potential of the business is limited as is its ability to scale-up rapidly.

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Securing funding is often affected by our perception of likely success. I see two issues when it comes to accessing finance for women.

Thirty nine per cent of the women exporters who spoke to WIGB said they felt gender makes a difference when borrowing money. Over half of domestic women entrepreneurs agreed.  These views are formed from a combination of preconceived impressions prior to any interaction and reacting to dealings with financial institutions.

These are of course perceptions but in my experience they ring true.

It is a matter of representation: when men dominate the business pages and TV interviews, compose the majority of speaker panels and dominate as decision makers in financing, women are given a strong message their faces don’t fit. Women naturally share negative experiences with financial institutions and as we know, bad news travels faster than good news.

The faces of women and especially mature women are underrepresented in business and business profiles. This underrepresentation reinforces the perception they are playing in the wrong league or, worse yet, don’t even belong in the sport.

At their worst, these perceptions fuel self-doubt and create a self-fulfilling prophecy of failure.

When these women meet with potential financiers, they are already convinced their businesses are at the right level and have the right basics. They have marshalled their reserves of courage but the ‘starting-from-behind’ mind-set works as a drag on this confidence. It may affect their presentation, pitch and confidence.

That’s not to say men don’t have the same issues about confidence and presentation but they do have positive role models with a track record of success which can build confidence.

The second issue is about decision makers. In the majority of instances, the people who actually make financing decisions are male.

So in your standard scenario – nine times out of 10 - a businesswoman turns up and makes her case across a desk to a male financier who will be making an important decision on the future of her business. The potential for pre-conceived expectations and even biases are clear.

A woman may portray her business differently. If she communicates and behaves differently and uses different terms and gestures, then that could possibly influence the manager’s decision because she behaves outside of the norm and possibly his comfort zone. This is unconscious bias at work, writ large in our financial system.

To me the lesson is clear: businesswomen are missing out and, if that’s the case, by extension the Australian economy suffers. Ensuring an appropriate gender balance in front-line financier positions is critical, as is developing specific programs to counter unconscious bias in these decisions. But it shouldn’t just stop there because the paperwork then goes up the line.

The media too has a role to play in altering preconceptions around entrepreneurs.  It is possible to report beyond the stereotypical entrepreneur of the young, white tech-head or middle aged males, although you don’t see it often.  In general when you look at Australian business portrayed in the media, you see mostly men. What does that say to businesswomen in Australia?

It says you don’t fit our norm.


For Australian banks, the threat of losing out to new platforms like crowdfunding is real and growing.  We know in the United States and in the United Kingdom crowdfunding has become a big source of capital for the kind of businesses these entrepreneurs operate. That’s the direction Australia will go down in time unless something changes.

Of course, if you look at the small business sector globally securing finance is the number one barrier. But why is it so much more difficult for these women in a developed country like Australia?

The Australian banking industry is one of the most sophisticated in the world but WIGB research suggests it is not effectively servicing half the population.

There is a huge opportunity for Australian lenders to embrace women in small business and those trading internationally, benefitting themselves, helping develop Australia’s SME sector and growing the Australian economy at the same time.


WIGB is actively helping remove barriers between female entrepreneurs and the financing they need to succeed in business.  We run access-to-finance workshops across Australia with the aim of putting these women  in the same room as the decision makers, including banks,  accountancy firms, angel investors, venture capitalists and as of last year crowdfunders.

The workshops achieve two things: they help female entrepreneurs build their skills and capacity to access finance and capital for international growth, expanding their networks with decision makers,  increasing their chances of success.

The second is focussed on the financial industry and the decision makers including the banks, accountancy firms, angel investors, venture capitalists and crowd-funders, helping them understand the needs of women entrepreneurs and seeking to influence their services to make the outcome a win-win.

Our feedback suggests hearing the stories of these women and some of the hurdles they have had to jump through to actually succeed in getting some financing is very educational and beneficial for these investors.

WIGB and the University of Melbourne are currently seeking women involved in international business to complete our latest survey. You can find more information here.

Cynthia Balogh is National Program Manager at Women in Global Business at Austrade.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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