The SBA’s Growth Accelerator Fund Competition is open for applications and ready to award successful incubators and growth accelerators with cash prizes. This competition, which awards the most innovative and promising small business accelerators and incubators, was announced by the Small Business Administration this morning. These prizes will give the winning organizations additional capital and ultimately assist promising start-ups and entrepreneurs.
By Jake Clabaugh, WIPP Government Relations
Women entrepreneurs face unintended consequences of wall-street reform. According to a House Committee hearing yesterday, the Dodd-Frank Wall Street Reform and Consumer Protection Act, introduced in an effort to prevent another financial crisis, is contributing to small businesses’ inability to access capital from banks.
WIPP’s Access to Capital Platform has cited some of Dodd-Frank’s regulations as a contributing factor to the decrease in small businesses lending. Capital access is a lifeline for small businesses. It is essential for entrepreneurs to have access to sufficient capital to found and grow businesses.
The House Committee on Small Business convened lenders and experts to discuss how Dodd-Frank has affected the ability to provide entrepreneurs with critical capital. Access to private capital, including bank loans is a primary concern to women entrepreneurs as women-owned small businesses receive only 4% of private sector lending dollars. Additional regulatory burdens could be exacerbating this problem.
The hearing touched on many of the difficulties WIPP members have experienced when trying to access to capital. The Committee cited increased administrative burdens as a significant cost for small and community banks, a primary lender to small businesses. These regulations have increased the cost of making loans and therefore made it more difficult for banks and borrowers. The result is less capital for entrepreneurs.
The hearing also cited the direct impacts on borrowers. Many that would have qualified pre-recession are no longer able to obtain loans from banks due to tighter lending standards. WIPP’s platform advocates for modernized credit scoring that would level the playing field for women business owners.
Until Dodd-Frank is fully implemented, its complete impact will remain unclear. WIPP continues to review ongoing regulations as well as work with Congress to scale back unnecessary barriers to capital access for women entrepreneurs.
While numbers of women entering labor force are steadily increasing, their participation in entrepreneurship is less favorable. In fact, according to the Kauffman Foundation, an entrepreneurship think tank, women are only half as likely as men to start a business resulting in unrealized potential for their contributions to job creation, innovation, and ultimately economic growth.
Kauffman Foundation released a new study claiming that women would make great entrepreneurs but they often fail to start their own business mostly due to following reasons:
- Shortage of available mentors;
- Perception of entrepreneurship as a masculine activity;
- Additional hurdles maintaining a work-life balance due to parenthood.
However, we can address these barriers as Kauffman highlights 5 ways for policymakers on how to encourage women to start their own business.
- Provide more exact, gender based, data on entrepreneurship programs and initiatives to understand how they can better help women entrepreneurs. Collecting data based on gender will help them to make more accurate decisions in assisting women entrepreneurs.
- Increase the number of women leading entrepreneurship programs. Women can better lead and support other women entrepreneurs by using their networks for accessing mentors, financial capital, and creating women inclusive events that attract women entrepreneurs.
- Increase Small Business Innovation Research (SBIR) awards to women-owned businesses. Although federal agenciesparticipating in the SBIR Seed Fund are encouraging women to engage in federal research/Research and Development, only 15 percent of SBIR awards went to women-owned businesses in 2012. One of the ways to increase this number is to partner with women’s professional organizations and make better effort of reaching out to women entrepreneurs to participate in these programs.
- Share stories of successful women entrepreneurs. Celebrating accomplishments of women entrepreneurs will change the false perception that only men are successful entrepreneurs and encourage more women to follow successful women in business.
- Decrease the risk of becoming an entrepreneur. Pressure and risks that women as entrepreneurs are facing, especially with young families, can discourage them of starting in the first place. By exploring various policies such as subsidized childcare or preschool, can help alleviate the pressure and create a more favorable environment for women to start their own businesses.
Read the full study here.
By Maria Contreras-Sweet
Administrator, U.S. Small Business Administration
With apologies to baseball and your mother’s apple pie, nothing is more American than National Small Business Week.
Our country was founded by risk-taking pioneers in search of new horizons. More than two centuries later, what sets America apart in the world is the willingness of our entrepreneurs to take risks. Small businesses allow Americans to be their own boss and improve their lot in life through hard work – a core American value.
Every year since 1963, the President of the United States has issued a proclamation declaring National Small Business Week to recognize the critical contributions of America’s entrepreneurs, who create nearly two out of every three net, new U.S. jobs each year. Federal Reserve Chair Janet Yellen said it was our small businesses that powered our recovery after the Great Recession.
National Small Business Week, themed “SBA: Dream Big, Start Small,” will be held May 4-8. Special events will take place in Miami/Boca Raton, Los Angeles, San Antonio, New York, and Washington. D.C.
Tune in all week for live-streaming, beginning at 1 p.m. ET Monday with a panel discussion on small business financing followed by a conversation with Joyce Rosenberg of the Associated Press. Or join me @MCS4Biz at #DreamSmallBiz. I promise you’ll learn a lot.
America is one of the few countries that give entrepreneurs a seat at the President’s cabinet table. This allows the U.S. Small Business Administration (SBA) to speak with one voice on behalf of 28 million small businesses with divergent interests.
The SBA also offers an extensive national network of small business lenders and counselors that’s unmatched anywhere in the world. Many entrepreneurs with great ideas and great potential do not begin with great wealth, so they need a great government partner to support their success.
The SBA offers the “three Cs” to help the best and brightest start or grow a business, secure capital, and commercialize their ideas to benefit society:
- Capital: SBA fill gaps in the commercial lending marketplace so success in the small business sector is based on merit, not family wealth. To inquire about a small business loan, click here.
- Counseling: SBA provides free consultation and advice to help businesses on Main Street succeed. To find a small business counselor near you, click here.
- Contracts: SBA levels the playing field with big business by helping small businesses capture new revenue and new customers by winning government contracts, joining corporate supply chains, and exporting beyond our borders. To learn about contracting opportunities, click here.
This year, during National Small Business Week, we recommit ourselves to those fearless entrepreneurs who plan well, work hard, and dream big. Every business starts small. Nike, Apple, FedEx, Ben & Jerry’s, Under Armour and Outback Steakhouse were all once small businesses, until they found an SBA lender or investor to work with them.
I came to this country as a 5-year old immigrant who didn’t speak a word of English. Today, I serve in the cabinet of the President of the United States. My story is possible only because of the entrepreneurial spirit.
Success in business comes one small step at a time. So dream big, but take that next small step today, because the next great American success story could be staring back at you in the mirror.
SBA Administrator Maria Contreras-Sweet started three businesses in Los Angeles, including a community bank, before joining President Obama’s cabinet in April 2014.