How Congress can help women entrepreneurs

Women entrepreneurs make up 36 percent of non-farm businesses in this country. That’s a third of American businesses. But how often do we hear Congress pledging to do everything they can to ensure women business owners have what they need to thrive?

Not often enough.

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If that happened with any other group making up a third of business in this country—and which is growing at nearly four times the rate of men-owned businesses and generating $1.6 trillion in receipts annually—you’d hear a whole lot more about it.

Women entrepreneurs are an economic force, but they have unique challenges their male counterparts don’t face and therefore need targeted policies to help them thrive. Women ask for less funding to start or grow their businesses—on average, $35,000 less than men—and they receive only 4 percent of all commercial loan dollars. In fact, WIPP’s annual membership survey regularly finds that women must make multiple attempts to secure bank loans or lines of credit, and 40 percent never succeed.

The U.S. Department of Commerce found women-owned businesses are still 21 percent less likely than their male counterparts to be awarded a federal contract, and women have limited opportunities to win some of the government’s largest contracts.

The list of issues goes on and on. 

Women business owners are leaping these hurdles and driving economic growth, but imagine what they could do if Congress made helping them a priority. WIPP has listed a comprehensive set of policies in its 2017 Economic Blueprint that Congress should prioritize in order to help women entrepreneurs thrive. The Blueprints covers access to capital, procurement, healthcare, telecommunications and technology, and export and trade—issues that have the most impact on women business owners’ ability to grow their companies.

To help women access capital, WIPP enumerates a host of recommendations on ways government can help women access capital, including making significant changes to the country’s capital infrastructure. This includes offering tax incentives to angel investors, developing more female fund managers through the Emerging Managers SBIC Program because research finds women lend to women, and rethinking the way credit scores are calculated.

Lending decisions relying on credit scores, employment history and income are undermined by the many studies that show women lag male counterparts in pay. What’s more, women are more likely than men to be in and out of the workforce due to caring for children or elderly family. Broadening the credit score scope to incorporate payment histories for utility, cable and cellphone bills, among others, could help women entrepreneurs establish credit history and secure the loans many of them desperately need to start and grow their businesses. 

In addition, WIPP encourages policymakers to support the small banking institutions like credit unions that often lend to small business and strengthen government investment in programs that provide training and counseling to women entrepreneurs.

For the past two years, the federal government has celebrated the fact that it hit its goal set two decades ago of awarding 5 percent of all small business government contracts to women. We’re immensely pleased that goal has finally been met, but let’s not kid ourselves—5 percent is modest, and it should be the floor, not the ceiling. How do we achieve more? Many of the large contracts the federal government favors, called Multiple-Award Contracts, have requirements to target various socio-economic groups to compete, but often there are no such requirements for women. That needs to change.

While women-owned companies are often bypassed on these large government contracts, when they do gain access to them, they win 20 percent of the bids, WIPP’s research has found. This is a strong indication that they are providing high-quality services and can compete with anyone. They just need the chance to get in the game. WIPP’s Blueprint calls on Congress to create socio-economic set-asides within these contracts for women-owned small businesses.

In addition to these issues, the Blueprint asks Congress to establish equitable tax treatment for all businesses—specifically the 90 percent of businesses that are organized as something other than a “C Corp;” to allow the self-employed to deduct their healthcare costs; and consider restructuring the health insurance marketplaces to allow small businesses to pool their buying power through associations to purchase healthcare across state lines.

These issues are just the tip of the iceberg for women entrepreneurs. Enacting just a handful of these in 2017 would help unleash the full economic potential of women entrepreneurs.

Women are an impressive economic force, now. Imagine what they could achieve with this kind of help from lawmakers.

Jane Campbell is the president of Women Impacting Public Policy, a national nonpartisan organization advocating on behalf of women in business 


The views expressed by this author are their own and are not the views of The Hill.