BFS study shows cashflow challenges for women-owned SMEs in the UK, affecting their growth and opportunities.

The growth and aspirations of women-owned SMEs are being hampered by cashflow issues, according to Bibby Financial Services (BFS) study. In contrast to the 66 percent of male respondents, the study finds that just 49% of women business owners report reliable cashflow that fits their demands. In addition, 43% of female business leaders acknowledge that they lack the financial flow necessary for expansion, showing a significant 14 percentage point discrepancy from their male colleagues.

This discrepancy points to a lack of confidence among male and female business owners in the UK, particularly with regard to the financial health of their organizations. Nearly half (48%) of the female business leaders surveyed express concerns about their ability to repay loans if interest rates continue to rise, compared to only 32% of their male counterparts, as the recent interest rate rise has further impacted profit margins and cashflow capabilities.

Lucile Flamand, the Chief Strategic Development Officer of Bibby Financial Services, responds to the situation, stating, “A significant impact on female-led businesses stems from an uneven playing field of institutional barriers and entrenched stigmas. It comes as no surprise that this disparity reflects in a confidence gap between women and men.”

Even in 2023, female entrepreneurs still have a considerably tougher time getting capital than their male counterparts do. In spite of generating twice as much revenue per dollar spent, female business entrepreneurs receive less funding than their male colleagues.

Having trouble getting funds

Beyond only a confidence issue, access to financing remains a significant challenge for women business owners. In comparison to their male counterparts, 50% of female business leaders had trouble obtaining capital and investment in the previous 12 months, according to the 2023 Alison Rose Review of Female Entrepreneurship.

According to BFS research, 62% of female SME executives, compared to 57% of male business leaders, said that getting a business credit is harder now than it was before the epidemic.

In spite of these challenges, female entrepreneurs are persistent and driven, as seen by the record 150,000 new businesses they created in the UK last year. The figures highlight the necessity of continuing to level the playing field, though.

Flamand stresses the significance of encouraging women-owned enterprises and making sure that lack of access to financing does not prevent their development.

She said: “Women business owners have so much potential to create innovative ideas and exciting businesses for the world. It is now more important than ever to make sure that we keep fighting the good fight – acknowledging both the opportunities and challenges for women-owned businesses, and making sure that access to finance is not one of them.

You can read the complete SME Confidence Tracker report to learn more about the resiliency and difficulties faced by firms in these unsettling times.

Gender gap
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