Biz2Credit Analysis of Women-Owned Companies Finds Earnings, Credit Scores, and Small Business Loan Applications Rose Dramatically in 2013

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Study of 10,000 Companies Finds Earnings of Women-Owned Businesses Increased 54% in a Year-to-Year Comparison

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Overall, the gaps are narrowing. This report shows that clearly women are doing better. Education is making a difference as more men than women are enrolled in and graduating from college.

Earnings and business credit scores of women-owned companies soared in 2013, according to, the leading online credit marketplace, which analyzed more than 10,000 applications from all across the U.S. on its platform during the past year. Average earnings for women-owned businesses rose to $54,114 in 2013 from $35,135 in 2012 -- a whopping 54% jump in a year-to-year comparison. Further, the average credit score for women-owned companies rose to 610 in 2013, up from 592 in 2012.

“The 600 benchmark is critical for any business seeking funding. Companies with credit scores under 600 find it next to impossible to secure bank loans and often resort to borrowing money from higher cost sources of capital, such as alternative lenders,” said Rohit Arora, CEO of Biz2Credit, who oversaw the research. “While the average credit score for women-owned businesses was 14 points lower than for male-owned companies, the gap has closed; in 2012, the difference was 40 points.”

The Biz2Credit report also found that twice as many women-owned businesses sought funding than they did in 2012. Overall, they raised $55 million with an average loan size of $85,000. Additionally, women are applying for loans after slightly more than two years in business (27 months), rather than 40 months in business, which was the case in 2012.

“This demonstrates a growth in confidence and a desire for company expansion,” Arora, one of the nation’s leading experts in small business lending, added. “It is further evidence of the economy’s slow, but steady, rebound from the Great Recession. Companies do not borrow money unless they anticipate that they will have the ability to pay it back.”

Key findings:

  • Twice as many women-owned businesses applied for credit in 2013 than they did in 2012.
  • Women-owned companies are applying for credit at an earlier stage in their life cycle.
  • The average credit score for women-owned companies rose to 610 in 2013 from 592 in 2012.
  • Average earnings for women-owned businesses rose to $54,114 in 2013 from $35,135 in 2012, a stunning 54% increase in a year-to-year comparison.

"These figures reflect confidence in the ability of women-owned businesses to pay back loans. Accordingly, the quality of companies applying for funding has improved as credit scores for female-owned companies rose to 610 from 592,” said Arora. "Having a credit score below 600 is a critical for any business seeking."

Women-owned vs. Male-owned Businesses:

  • Women to Men Ratio: 27% vs. 73% registrations on in 2013.
  • Average Annual Revenue: Average revenue for women-owned businesses ($54,114) was $24,617 lower than the annual revenue of male-owned companies ($78,731) in 2013.
  • Average Operating Expenses: Women-owned businesses tended to have average operating expenses. Expenses were 41% of earnings for women-owned businesses; 38% for male-owned companies.
  • Average Credit Score: On an average, the credit scores for women-owned businesses (610) were 20 points lower than for male-owned companies (630). The difference was 40 points in 2012.
  • Average Age of Business (in months): 27 vs. 31 (the age of businesses applying for loans was lower for women-owned businesses).

Biz2Credit cited the following causes for the improvement of the fortunes of women entrepreneurs:

1. Education is making a difference. More women are enrolled and completing their college degrees at this point. Eventually this fact is showing up in the economy.

2. The U.S. is now a knowledge-based economy that takes advantage of technology. Women can work from home, take care of the family, and work on a laptop or, increasingly, a smart phone.

3. Women-owned businesses have become more competitive, more efficient, and more cost effective than ever before. For instance, the retail industry has changed. Traffic is built via social media as consumers check profiles, reviews and comments about businesses.

4. The rise of digital and social media has significantly reduced marketing costs. Companies can engage in mobile advertising and social media outreach, instead of spending a fortune on TV advertising. New tools in the marketing tool kit, and they are cheaper forms are more effective in reaching target audiences.

5. Online lending portals have incorporated lenders eager for the high yields that small business lending can produce while also lowering the cost of capital. Business owners shop for lower interest rates and faster loan approvals just as consumers comparison-shop online for deals from retailers. Entrepreneurs have taken to the web in order to find start-up loans, expansion loans, lines of credit and other types of financing.

6. New entrants, such as institutional investors, in the small business lending marketplace, and the aggressiveness of small banks in making SBA loans, have greatly benefitted small business borrowers. Interest rates, particularly among cash advance companies, dropped between 5-6% in 2013 primarily due to competition in the marketplace.

7. Overall startup costs of all types of businesses have gone down. Cloud computers have replaced big servers, and companies don’t need big offices as many employees conduct business from home on their laptops, tablets and smart phones. The business world has gone virtual, which saves money for women who have entered high margin consulting businesses, such as p.r., social media marketing, etc.

The small business loan approval rate for women-owned companies was 31% in 2013, compared to the 2012 rate of 26%. However, the funding success rate of female-operated firms remains 8% lower than they are for male-owned companies (39%). Part of this can be attributed to large banks that are still relatively unwilling to fund firms that have been in operation for less than two years.

“Women-owned businesses have been able to secure funding from non-bank lenders, which are more willing to lend to younger businesses than big banks are. The catch is that they usually charge higher interest rates,” Arora explained. “I expect that this scenario will correct itself as women-owned companies mature and expand. As female entrepreneurs gain experience, the gap should continue to close.”

“Overall, the gaps are narrowing. This report shows that clearly women are doing better. Education is making a difference as more men than women are enrolled in and graduating from college,” Arora continued. “Women are entering low investment, higher margin businesses, such as interior design, consulting, eLearning, social media and even cupcake businesses. Technology is helping them cut operating, marketing and financial costs.”

On Thursday, March 6th, Biz2Credit will host a webinar, The Venus and Mars of Small Business Finance, from 3:00 - 4:00 p.m. ET, during which entrepreneurs can ask advice of small business experts. The webinar will be hosted by veteran female entrepreneur and small business expert Anita Campbell, founder, CEO and Publisher of Small Business Trends and feature Rohit Arora, CEO of Biz2Credit, who will examine small business lending programs for women entrepreneurs and sources of funding in a still tight credit marketplace; Lisa Cook, a former member of the President’s Council of Economic Advisers, who will examine the overall impact of small business on the U.S. economy; and John Meyer, Director of Education for The Company Corporation, who will talk about the importance of choosing the right business structure, differences between forming a corporation (C-Corp or S-Corp) and an LLC, and some of the tax implications of each business format. Click here to register.

About Biz2Credit
Founded in 2007, Biz2Credit has arranged more than $1 billion in small business funding throughout the U.S. and is widely recognized as the #1 online credit resource for startup loans, lines of credit, equipment loans, working capital and other funding options. Using the latest technology, Biz2Credit matches borrowers to financial institutions based on each company's unique profile -- completed in less than four minutes -- in a safe, efficient, price-transparent environment. Biz2Credit’s network consists of 1.6 million users, 1,200+ lenders, credit rating agencies such as D&B and Equifax, and small business service providers including CPAs and lawyers. Visit, follow on Twitter @Biz2Credit, and Facebook

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