Snapshot: 7(a) Lending to Women-Owned Small Businesses

Access to capital is a perennial challenge for entrepreneurs and small business owners. To encourage lenders to make loans to small businesses that have not otherwise been able to secure financing on reasonable terms and conditions, the Small Business Administration (SBA) provides support through several loan guarantees.

The 7(a) loan guaranty program is the SBA’s flagship lending support program. In fiscal year 2022, the SBA approved 47,677 (7a) loans, totaling $25.6 billion.

During National Women’s Small Business Month, we look at the 7(a) lending landscape for women-owned small businesses.

Women-Owned Small Businesses Receive Small Share of 7(a) Loans

Men own 63% of small employer businesses in the United States yet win a greater share of 7(a) loans. For the past decade, women-owned small businesses have won about 30% of 7(a) loans annually.

Small Businesses with a Majority of Female Owners Are Getting More Loans

There has, however, been some divergence in 7(a) approvals for small businesses owned by women. Those that are majority female-owned have seen their share of 7(a) loans rise from 16% in fiscal year 2012 to 20 in fiscal year 2022. This is roughly in line with the overall female share of small employer firms.

Women-Owned Small Businesses Get Fewer 7(a) Loan Dollars

Not only do women-owned small businesses receive fewer 7(a) loans, but the value of those loans is also significantly less than their male counterparts receive. In fiscal year 2022, the value of 7(a) loans received by male-owned small businesses was more than twice the value of loans supporting women-owned small businesses.

The average 7(a) loan size is also smaller for women-owned small businesses. In fiscal year 2022, women-owned small businesses received nearly $100,000 less, on average, than businesses owned by men.