Cash flow challenges undermine growth of UK female-led SMEs

New research from Bibby Financial Services (BFS) reveals the ongoing challenges for female business leaders in the UK, with 43% claiming to lack the necessary cash flow for growth. This contrasts with just 29% of male business owners expressing the same concern, highlighting a significant 14% gender gap.

The study, conducted on 24th July 2023, discovered that only half of female business owners found their cash flow to be stable and satisfactory, while two-thirds of male business owners reported no such issues. The data suggests a confidence gap between UK female and male entrepreneurs when it comes to company finances.

Further exacerbating the issue, last month’s interest rate rise has added pressure on profit margins and cash flow capabilities. Almost half of the surveyed female business leaders expressed worries over their ability to repay loans if interest rates continue to rise, compared to only 32% of male respondents.

BFS Chief Strategic Development Officer, Lucile Flamand said, “An uneven playing field of institutional barriers and entrenched stigmas have significant impact on female-led businesses, and so it is entirely unsurprising that this is reflected in a confidence gap between women and men.

“The ugly truth is that, even in 2023, it’s still much harder for female entrepreneurs to access funding than it is for their male peers. In fact, women business owners receive less than half of the investment capital of their male counterparts, despite delivering twice as much revenue per dollar invested.”

These issues extend beyond mere confidence. The 2023 Alison Rose Review of Female Entrepreneurship revealed that half of the female business leaders find it difficult to secure funding, compared to 40% of their male equivalents. BFS’ research backs this finding, with 62% of female SME leaders confirming it’s harder to secure a business loan now than it was pre-pandemic.

Despite these challenges, Flamand remained optimistic about the prospects of female entrepreneurs in the UK. She drew attention to the 150,000 new firms founded by women in the UK in the past year, asserting that the fight for equal access to finance should continue.

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