Most previous studies of this topic have followed a methodology of selecting a sample of women business owners, and then questioning them on their experience with their own business(es). Although financing frequently is noted as a major problem, previous studies suffer from the absence of a "control" group-a corresponding group of male business owners with whom to compare experiences. Furthermore, previous studies have tended to ask the respondent if she believes that she was treated any differently because she was a woman, a leading question which could potentially bias the conclusions. Previous work reveals a pervasive perception that there is discrimination by bankers against women business owners, a conclusion based on a widespread, but subjective, perception by some women owners; however, there also appears to be a lack of real statistical evidence. Moreover, it is not clear that personal feelings of apparent "reluctance" displayed by some bankers carry over to professional judgements and to systematically different terms of credit. One of the contributions of this paper is that a comparison of the actual experiences of both female and male business owners in their relationship with financial institutions are compared over a fixed period of time. Every attempt has been made to carry out these comparisons in a rigorous, statistical manner. Another contribution arises because the findings to be described here are based on a broad and comprehensive study of the small business/banking relationship and did not exclusively focus on the male/female issues. Thus, any bias that could have occurred in other studies by focusing on women business owner problems is likely to be minimized. The findings described in this study are based on a total of 3,217 business principals' responses to a national survey. The number of women business owners in the sample was 153. In aggregate, it was found that the financing conditions for women principals are less favorable than those for male business owners; however, it was also found that female-owned firms tend to be both younger and smaller than male-owned firms in the sample. Moreover, woman business owners were more likely to be proprietors than their male counterparts, and were less likely to be incorporated businesses. In addition, a statistically significant tendency for businesses owned by women to be characterized by lower rates of sales growth than those owned by men was also identified. These differences between patterns of small business ownership between men and women allow alternative explanations of what might at first seem to be an apparent gender bias. In order to separate the effects of ownership patterns from potential gender bias, it was necessary to focus on the effect of the gender of the owners by holding constant those factors which provide alternative explanations of the aggregate results. This was accomplished by creating benchmark subsamples of male respondents by matching women respondents with male respondents on the basis of age, size, industry, growth rate, and organization form of the businesses. When this was done, one area was identified in which statistically significant gender-related differences remained: that of collateral requirements for a line of credit. Apparent gender-related differences in the other aspects of banking practices (rates of loan approvals, cosignature requirements, requirements for loan collateral, and interest rates on loans and lines of credit) can be accounted for by the differences in the characteristics of male - and female-owned businesses. The difference in the collateral required of men and women owners is an important difference. Collateral requirements were identified as a major concern by a high proportion of all survey respondents; in fact, collateral requirements appear to be the major banking-related concern of small businesses. The line of credit is viewed to be essential to growth and survival, yet a lower proportion of women owners than men owners report having a line of credit. Thus, it seems that development of the banking relationship-including the establishment of a line of credit-has proven more difficult for women than for men.

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Journal Journal of Business Venturing
Riding, A.L, & Swift, C.S. (Catherine S.). (1990). Women business owners and terms of credit: Some empirical findings of the Canadian experience. Journal of Business Venturing, 5(5), 327–340. doi:10.1016/0883-9026(90)90009-I