For decades, women business owners have faced a persistent challenge: access to capital. Despite owning nearly half of all small businesses in the U.S., women often encounter barriers to financing. I’ve seen from my experience at the SBA and now First Women’s Bank, that one of the biggest drivers of the gender lending gap isn’t just rejection, it’s that many women don’t come forward for financing at all. Whether due to lack of awareness, confidence, or systemic hurdles, “access” captures both those who are denied and those who never apply.
Also driving the gender lending gap is the type of capital women seek. Women often seek startup capital that is difficult to obtain, rather than growth and acquisition capital. Especially pronounced is the lack of acquisition financing in the women’s economy. Women are starting businesses at twice the national average, yet based on my experience, the number of women engaged in financing business acquisitions versus startups is relatively low.
That matters because when women choose to bootstrap startups and grow organically rather than acquiring an existing business, they are choosing the long road to success. Business acquisitions can be a powerful shortcut to scale. Starting from scratch means building infrastructure, cash flow, and customer relationships, one step at a time. Acquiring an established business gives you all that on day one, plus brand equity and proven operations. It’s a way to bypass early-stage risk and accelerate growth by leveraging what’s already working.
SBA LOANS AND REAL ESTATE
And back to the issue of access to capital. A startup, from a bank’s perspective, can be risky to finance and difficult to underwrite as the bank can only review projections. Financing an acquisition can be more achievable, as the bank can underwrite the acquisition target’s past business performance. SBA 7(a) loans are a strong financing option for business acquisitions, and combining an equity raise with SBA financing is yet another strategy that can create a healthy debt-to-equity structure and lower the debt burden for the business post-acquisition.
Financing the acquisition of owner-occupied real estate, or in other words, acquiring real estate for your business to operate from, is another underutilized strategy in the women’s economy. Real estate assets can strengthen your balance sheet by adding real estate collateral, which can be used to secure future growth financing. Real estate ownership can stabilize expenses, eliminate landlord restrictions, and build long-term control and consistency. Over time, these assets don’t just support operations; they enhance your business value to your banks and investors. For owner-occupied real estate acquisition, SBA 7(a) and 504 loans can offer lower down payments for those who qualify.
ACQUISITION FINANCING TO CLOSE THE GAP
Strategic acquisition financing can lead to women controlling more assets, gaining negotiating power, improved financing terms, and the ability to reinvest in their companies and communities. Financing the acquisition of both business and real estate assets creates a virtuous cycle of empowerment, growth, and credibility, a critical step toward closing the gender lending gap.
Marianne Markowitz is CEO of First Women’s Bank.