Financial woes continue to plague nearly half of women small business owners

This National Women’s Small Business Month, women entrepreneurs continue to deal with the economic fallout of the pandemic, the Delta surge and issues like vaccination and the labor shortage.

Nearly 60% of Black women small business owners and almost half of women owners overall continue to struggle financially due to the pandemic, according to new data from Goldman Sachs. A smaller share of men owners, 39%, said this.

Goldman Sachs recently found about 4 in 10 small business owners are worried the debt they’ve accumulated will hurt their ability to recover; even more Black owners have this concern. The Delta variant has crushed the confidence business owners had going into this fall, and many are looking for more federal assistance to stay afloat.

Additionally, about half of women entrepreneurs cut their own pay to keep staff members employed during the pandemic, Bank of America’s 2021 Women Business Owner Spotlight found.

More than half of Black women small business owners said they’ll need to take out a business loan this fall or winter; only 27% of their male peers said the same. About 47% of women small business owners have less than three months’ cash reserves, per Goldman Sachs. 

As the Delta variant has spread more easily among children and teens this fall, close to 60% of women small business owners under age 45 said a potential return to remote learning would make it hard to retain employees confronted with childcare challenges.

Given these stressors, it’s not surprising more than half of women small business owners said they or their employees have been plagued by mental health issues during the pandemic; 7 in 10 women under 45 said this, per Goldman Sachs. However, only 18% of women entrepreneurs can pay for sufficient mental health resources for employees.

Despite all of this, many women entrepreneurs are optimistic, expecting their revenue to increase in the coming year, Bank of America found. 

Experts have warned pandemic recovery will take longer for women- and Black-owned businesses; the Delta variant and slow vaccination rates in some areas haven’t helped. Women entrepreneurs have said additional tax breaks or grants would be the biggest boost to their recovery.

Bank of America and Seneca Women this week announced the launch of the Access to Capital Directory, an online platform for women business owners that identifies funding sources. Considering more than half of women small business owners say men have greater access to capital, the platform could help women entrepreneurs close that gap.

Jill Bommarito, founder and CEO of Ethel’s Baking Company and member of Goldman Sachs’ 10,000 Small Businesses Voices national leadership council, said there’s work to do to level the playing field for women entrepreneurs.

“Over the last year, female small business owners have been disproportionately impacted by the pandemic’s many unprecedented challenges. We need to prioritize women-owned small businesses now, or risk undoing decades of progress,” Bommarito said, per a Goldman Sachs news release. 

Goldman Sachs noted a gender gap in federal contracting, too. Just one-quarter of women small business owners that have applied for federal contracts have been awarded one, and only 9% believe small business owners have a fair shot when vying for federal contracts against larger companies.

-bizwomen

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