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Women entrepreneurs are the fastest growing group of business owners in Canada, yet they still face barriers to starting and building companies.
The ranks of women-owned businesses in Canada have grown more than 200 per cent over the last 20 years to about 820,000 companies. Collectively, they contribute $18 billion to the economy.
But close to 60 per cent of women-owned, small-and-medium sized businesses are in a slow-growth stage of development. They export less than male-run companies and request less financing, research shows.
"Women need to be backed more proactively," said Michel Ré, Executive Vice President, Investments, at the Business Development Bank of Canada (BDC). "Women's associations across Canada have raised financing as one of their top priorities. So that indicates there's a portion of this market that is underserved."
BDC has created a $25-million fund targeted at women-owned companies. The fund aims to help fast-growing businesses expand and seek out new market opportunities outside Canada. It complements BDC's existing $1.3-billion portfolio of business with about 5,000 women entrepreneurs.
Access to capital is a top priority for women entrepreneurs, said Ada Lee, past president of the non-profit Women Entrepreneurs of Canada.
"We have found that women have a harder time arranging financing," said Lee, President of Adan Group Inc., a Toronto consulting firm that helps companies expand internationally. "And the amount of financing you can arrange has a direct impact on how much and how fast the business will grow."
There is a debate over the reasons why there are lower levels of financing for women-owned businesses. Studies indicate that women are more reluctant than men to borrow money to finance their businesses, preferring to use their own savings.
But a 2000 Statistics Canada survey of small- and medium-sized businesses found that when women entrepreneurs did apply for credit they were approved at a rate of 82 per cent versus a rate of 80 for male entrepreneurs.
Michel Ré said a key issue for women entrepreneurs is that their companies are often in service industries and have little in the way of fixed assets that can be used for collateral for loans.
BDC has responded to this issue in its new fund by offering women entrepreneurs subordinate financing, a hybrid instrument combining the characteristics of both debt and equity financing that requires less collateral.
Exporting is another tool that women entrepreneurs can use to put their companies on a faster-growth track. Less than 10 per cent of women-owned businesses currently export, indicating there is lots of untapped potential for growth.
"We know that small- and medium-sized businesses with international activities experience growth rates that are three to four times the average," said Linda Graupner, Director of the emerging-exporters team at Export Development Canada. "Export markets offer women-owned businesses access to higher growth rates, opportunities to innovate and better job opportunities for their staff."
Guadalupe Reusing is a successful entrepreneur who says she believes it's harder for women in the early stages of running a business.
Reusing is President and Chief Executive Officer of a fast-growing, 10-year-old company called Memory Experts International Inc. It makes memory upgrades and other products for office equipment like copiers, fax machines and printers and now has 150 employees in three countries.
"It's a challenge but a wonderful challenge," said Reusing, whose Montreal-based company has received BDC financing. "There's a lot of opportunity in the market and women who persevere will definitely succeed."
For more information, call 1 877 BDC-BANX (232-2269).
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