May 5th, 2006

Failure to find funding deters female entrepreneurs in London

Female entrepreneurship in London is being hampered by a perceived lack of funding, according to research by the FDA, the UK association for the invoice finance industry.

The survey, conducted at the Access to Finance for women entrepreneurs road show, run by the DTI's Small Business Service and the London Development Agency, found that one third of women in London felt it was harder for female entrepreneurs to get funding to start their business. They also identified obtaining funding as their top business challenge for the next year.

Other key findings from the survey include:

• 47 per cent said lack of funding had prevented them from starting their own business sooner
• Despite this, 50 per cent intended to start their own business in the next 6 months
• Women aged 40 to 50 were more likely to want to start their own business than those aged between 20 and 30
• The opportunity to 'be their own boss' was the main reason for them wanting their own business, followed by flexible working and financial rewards
• Women are as likely to seek advice from family and friends as they are from professional advisers like bank managers and accountants
• 67 per cent believe they don't have enough information on legislation and regulations effecting business

The women's access to finance road show focussed on raising greater financial awareness, particularly on the different types and sources of business finance available and provided direct help and advice to women entrepreneurs with finding the appropriate finance for their businesses.

Commenting on the results, Kate Sharp Chief Executive Officer of the FDA, said: "It's astonishing to think that in the 21st century women still feel they don't have the same access to funding as men.

"Financial service providers need to work harder at making women aware of the range of products available for initial start-up and ongoing growth Increased awareness and education will help overcome the perception of a funding gap and ultimately add the health of entrepreneurship in this country."

The survey also explored the female entrepreneurs' relationship with their financial advisers and found that accessibility and flexibility were the key factors that influenced their choice of adviser.

"Our study revealed that the majority of women want their adviser to provide more access to impartial advice and market research to help make better informed business decisions," Kate added.

Meg Munn, Deputy Minister for Women and Equality said: "We know from our own research that access to finance is one of the key factors that women identify as a barrier to business start- up and growth. That is why we have been working with the Women's Stakeholder Group and Regional Development Agencies to raise greater financial awareness amongst women entrepreneurs through a series of regional road shows.

I know that feedback from these road shows has been extremely positive with women valuing the opportunity to access information and advice and I welcome the involvement of the FDA at these events, in helping to raise awareness of the different financing options open to women entrepreneurs to help them start and grow their businesses."

The survey was conducted as part of the FDA's tenth anniversary. The invoice finance industry is now worth more than £148 billion, a growth of 460 per cent since 1995. Last year around 43,000 businesses in the UK were advanced over £11 billion by FDA members, with SMEs accounting for 99 per cent of clients using invoice finance.

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