Lots of recent data has revealed that when it comes to obtaining financing, small businesses are generally having a much more difficult time than their larger competitors. Moreover, though, it seems that this problem disproportionately affects independent companies run by women specifically. As such, it seems that lawmakers in the U.S. Senate are moving forward to improve access to this kind of lending for those troubled enterprises specifically.
U.S. Sen. Maria Cantwell, a Democrat representing Washington state who chairs the Senate Committee on Small Business and Entrepreneurship, recently introduced a bill that would allow for greater ease when small businesses run by women more access to loans, and also contracts with the federal government, according to a report from the Associated Press. Recent data compiled by the committee found that women only receive about 4.4 percent of all small business loan money in the U.S., despite the fact that they own close to 1 in 3 such companies.
“Clearly with women, we are being underserved,” Cantwell told the news organization. “We see issues with minorities the same way we’ve seen them with women. We want to make sure they’re getting access to the right help and support.”
Cantwell further noted that as recently as 1988, small businesses run by women had to have a male family member co-sign on any loan for which they applied, and while that kind of discrimination obviously no longer exists in the market, there still remain some obvious hurdles, the report said. Interestingly, it seems that one reason these firms can’t obtain the approval they may need to expand is that companies run by women tend to prefer less conventional loan types, especially those with smaller amounts.
Cantwell also hopes to turn lawmakers’ attentions to providing additional assistance for other small business owners who may be underserved by the current lending system, the report said. That includes those owned by minorities, and veterans, particularly those who served in the recent wars in Iraq and Afghanistan.
No matter what their plans, owners should try to shore up their finances ahead of any application for a loan. That might include finding more affordable small business insurance coverage – including liability insurance – as a means of significantly reducing costs on an annual basis, and giving them considerably more flexibility down the road.