Opportunity Knocks

As Julie Weeks, research director for the National Foundation for Women Business Owners (NFWBO), sees it, the relationship between women business owners and bankers four years ago is analogous to the relationship between Dorothy and the Wizard of Oz. "You went through these large doors, down a long hallway," Weeks explains, adding that today, fortunately, "women and bankers treat each other more like equals."

A recent NFWBO study verifies that women entrepreneurs are much more likely to be satisfied with their banking relationships than they were four years ago, as the number of women reporting one or more problems in working with their banks dropped by 15 percent. The number of women who used credit cards as a source of capital was down to 23 percent, and nearly three-quarters of women surveyed were using business earnings to finance their firms.

"There's been a tremendous improvement in access to capital among women-owned businesses," says Weeks. "Between 1992 and 1996, women business owners' use of credit cards dropped by half, their use of business earnings doubled, and their banking relationships improved. Today, men and women are similar in where they get their capital for their businesses, whereas four years ago, they were not at all similar."

Why, after decades of struggles, have women suddenly shot forward in the capital game? "There's been improvement on both sides," says Weeks. "Not only have women business owners become more savvy about these matters and boast businesses that are more stable and mature, but the banking community has experienced an awakening. They've made tremendous efforts to reach out to women business owners and have taken a proactive role in making the relationship better."

In fact, so rosy are the study's findings that Weeks has even managed to find a silver lining in the cloud that used to plague women. About half the men and half the women have bank credit, but they use it for different purposes. Men business owners are more likely to use it for evening their cash flow or for consolidating debt, whereas women are more likely to use it for growing their businesses. "Women don't have debt they have to consolidate," muses Weeks, "because they didn't have the access four years ago that would have allowed them to incur it."

This article was originally published in the February 1997 print edition of Entrepreneur with the headline: Opportunity Knocks.