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Women Short-Changed Despite Business Gains

The Small Business Administration (SBA) says small businesses create nearly two out of three new jobs in the nation's economy, and more than half of working Americans are employed by small businesses. But with small businesses serving as such a vital engine for the U.S. economy, how many of them are owned and run by women? And why aren't there more?

The number of U.S. businesses owned by women is, in fact, growing by leaps and bounds, with the Census Bureau reporting that women's business ownership rates are up nearly 27 percent since 2007. But when it comes to receiving contracts and capital, women are still being short-changed. Women make up more than half of the population but receive only 4 percent of venture capital, according to Bureau of the Census statistics.

The SBA's Women-Owned Small Business Federal Contract Program was created so that women-owned small businesses (WOSBs) could tap the well of nearly $90.7 billion in federal contracts that go to small firms each year. Federal contracts going to WOSBs accounted for 5.05 percent – or $17.8 billion of all small business-eligible contracting dollars – during 2015, rising past the SBA's 5 percent goal for the first time, the agency reports.

Erin Andrew and John Shoraka, writing for the SBA, state that small-business contract dollars represent a huge impact on the American economy, supporting job creation, innovation, and growth. Last year, the federal government awarded an all-time high of 25.75 percent of government contracts to all small businesses, supporting 537,000 American jobs. When federal dollars reach local communities, they create a multiplier effect that strengthens the local tax base, and that can lead to better government services and better schools, according to Andrew and Shoraka.

Census Bureau statistics show there are more than 9.8 million women-owned businesses in the U. S. today. That's an increase of more than two million businesses, or 26.8 percent, from 2007, according to the Census Bureau. Of nonfarm and privately held businesses, 36.3 percent are owned by women, up from 28.8 percent in 2007. It is clear that women's entrepreneurship is on the rise; and women-owned businesses generate $1.4 trillion in receipts.

The SBA says it has taken the following steps to enhance women's role in business:

  • Expanding its lending, making nearly $16.4 billion available through more than 45,900 SBA loans to women-owned businesses.
  • Implementing the SBA's Women-Owned Small Business Federal Contract Program in 2011.
  • Implementing provisions of The National Defense Authorization Act of FY2013 which removed the dollar caps on set-aside contracts under the WOSB program.
  • Collaborating with the White House and senior officials at each federal agency to ensure agencies are held accountable for the government-wide small-business contracting goal.
  • Increasing outreach efforts to ensure that small businesses are aware of the WOSB program and educating small businesses on the nuances of federal contracting by partnering with WIPP and American Express OPEN on initiatives such as ChallengeHER, a national program to help boost government contracting opportunities for women-owned small businesses.


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This article was written by a professional financial journalist for Amherst Financial Services and is not intended as legal or investment advice.

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