53% of women say limited access to finance makes starting a business difficult - Business Leader News

53% of women say limited access to finance makes starting a business difficult

More than one in two (53%) women across the UK find it challenging to start their own business, with limited access to finance the most significant barrier, a survey by Tide, the digital business financial platform, has warned.

Recent figures show that all-female-led companies accounted for a record 20% of all new businesses created in the UK in 2022, up from 16% in 2018. Despite this, the process of starting a business remains difficult for many women, according to a survey of 1,961 Tide members.

Around a fifth (19%) of women cited gender as a barrier to successfully launching a business. Around 72% of women who found it difficult to start a business launched their venture in the past two years.

The survey shows clear variations among women from different ethnic minorities. More than two in three (68%) Black female business owners find the process of launching a new venture hard – they are 20% more likely to find it challenging than their white and Indian counterparts (49%). Regionally, women based in Northern Ireland (73%), Scotland (64%) and the North East (59%) find it the toughest to start a business.

More than half (54%) of women say limited access to finance is the top roadblock to launching a business. In fact, half (50%) of female business owners applying for a loan or investment to fund their new business are rejected, according to Tide’s survey.

Top roadblocks for women launching a business:

  1. Not able to secure investment, loan or money from friends/family – 54%
  2. No business mentor or a role model – 11%
  3. Limited knowledge on how to set up a business – 9%
  4. Lack of self-confidence – 8%
  5. Limited knowledge of the business areas – 7%

Tide surpasses 100,000 commitment

The survey results come as Tide announces that it has exceeded its target, ten months ahead of schedule, to help 100,000 female-led UK businesses start out by the end of 2023. As of March 2023, Tide has welcomed over 110,000 women to its platform, making up 25% of its total members. Tide plans to announce a new commitment in the UK later this year aimed at supporting more women to launch their own businesses.

Heather Cobb, SVP Member Engagement at Tide, said: “Meeting our target to onboard 100,000 female-led businesses in the UK by the end of 2023, almost a year early, is a great achievement and one we’re very proud of. It’s a testament to our desire, at Tide, to support more women into entrepreneurship – we believe gender should not be a barrier to starting your own business.

“However, as highlighted in our survey, there’s still a long way to go in making it easier for women to do this including tackling hurdles on funding and mentorship. By listening closely, we’re working to provide further support to help all our members expand their networks, improve their operational know-how, secure finance and reach their full potential as successful SMEs.”

The top UK regions where women are struggling to access finance:

  1. Yorkshire and Humber – 64%
  2. Scotland – 53%
  3. Northern Ireland – 43%
  4. West Midlands – 42%
  5. East England – 37%