Why the financing gap for women entrepreneurs is wider than approval rates suggest

Key takeaways

• 25% of women plan to start a business in 2026 and 47% call access to money their biggest obstacle, per a QuickBooks survey of 3,000 U.S. adults.
• Federal Reserve data on existing firms show women-owned businesses applied for financing more often than men-owned firms in 2024 and were not more likely to be denied, but they sought smaller amounts and were more likely to avoid applying out of debt aversion.
• Women-owned firms lean more on credit cards, online lenders, CDFIs and credit unions, while seeking large bank loans and lines of credit less often than men-owned firms.

A quarter of women in the United States plan to start a business in 2026, and 58% say they either plan to or would consider launching one within the next year, according to an Intuit QuickBooks survey of 3,000 U.S. adults commissioned in December 2025. Nearly half of those aspiring founders, 47%, named a lack of money as the single biggest obstacle to getting started.

Federal data on businesses that already exist add detail to that picture, and complicate a simple story of women being shut out. The Federal Reserve’s Small Business Credit Survey, fielded from September to November 2024 among small employer firms nationwide, found that women-owned firms applied for financing more often than men-owned firms and were not more likely to be denied. The gap shows up elsewhere: in how much money women ask for, which products they use, and how many decide not to apply at all.

What Aspiring Founders Say About the Money Problem

In the QuickBooks survey, 56% of aspiring women founders said they would rely on personal funds to start their business. Smaller shares planned to use small business loans, 47%, or business credit, 42%. Both figures trail men: 59% of aspiring male founders said they would use small business loans and 57% said they would use business credit.

A third of respondents, 33%, cited fear of failure or financial loss as a major concern. Among women who already own businesses, 32% said they had never needed to apply for funding, according to a companion QuickBooks survey of 1,305 U.S. business owners commissioned the same month.

The Microloan Option
The SBA’s microloan program offers up to $50,000 through nonprofit intermediary lenders, with an average loan size of about $13,000, a maximum seven-year term and interest rates generally between 8% and 13%, according to the SBA.

What Happens When Women-Owned Firms Actually Apply

The Federal Reserve’s 2025 Firms in Focus chartbook on firms by gender of ownership, based on the 2024 Small Business Credit Survey, shows 64% of women-owned employer firms applied for some type of financing in the prior 12 months, compared with 58% of men-owned firms.

Among firms that applied for a loan, line of credit or merchant cash advance, women-owned firms were denied 18% of the time, versus 21% for men-owned firms. Women-owned firms were partially approved 28% of the time, close to the 29% rate for men-owned firms, and fully approved 54% of the time, compared with 50% for men-owned firms.

On these particular 2024 figures, women-owned firms did not fare worse than men-owned firms in getting approved. The more common outcome for both groups was full approval, not partial approval, which complicates a narrative that women-owned firms are routinely shortchanged at the approval stage.

A Gap in How Much, Not Just Whether

The financing gap becomes clearer in the size of the requests. Among firms that applied for financing, 35% of women-owned firms sought $25,000 or less, compared with 19% of men-owned firms. At the other end, just 2% of women-owned firms sought more than $1 million, compared with 9% of men-owned firms.

The types of financing sought also differ. Women-owned firms were more likely to seek credit cards, 38% versus 28% for men-owned firms, and less likely to seek loans, 24% versus 27%, or lines of credit, 19% versus 24%. Women-owned firms carry less outstanding debt overall: 15% held more than $250,000 in debt, compared with 28% of men-owned firms.

Women-owned firms were also more likely to say they sought financing specifically to meet operating expenses, 65% of applicants versus 52% of men-owned applicants. And 63% of women-owned firms reported difficulty paying operating expenses in the prior 12 months, compared with 52% of men-owned firms.

The financing gap becomes clearer in the size of the requests, not in whether they get approved.

Why Some Women Don’t Apply At All

More than a third of women-owned firms, 36%, did not apply for any type of financing in the prior 12 months, close to the 42% share among men-owned firms. But the reasons diverge. Among firms that did not apply, 48% of women-owned firms said they had sufficient financing already, compared with 60% of men-owned firms.

Women-owned firms were more likely to cite debt aversion as their primary reason for not applying, 28% versus 21% for men-owned firms, and more likely to say they were discouraged, meaning they did not think they would be approved, 12% versus 8%. Those two categories point to a gap that shows up before an application is ever filed.

Which Funding Paths Are Getting Used

Among firms that applied for a loan, line of credit or cash advance, women-owned firms were somewhat less likely to apply to large banks, 37% versus 40% for men-owned firms, and small banks, 26% versus 30%. They were more likely to apply to online lenders, 27% versus 23%, credit unions, 11% versus 9%, and community development financial institutions, or CDFIs, 8% versus 6%.

Women-owned firms were also more likely to receive grants, 7% versus 3% for men-owned firms, and loans from family or friends, 10% versus 8%. The Small Business Administration’s microloan program, which offers loans up to $50,000 through nonprofit intermediary lenders, carries an average loan size of about $13,000, a seven-year maximum term and interest rates generally between 8% and 13%, according to the SBA. The program is aimed at small businesses needing modest amounts of capital and is often paired with technical assistance.

Women-owned employer firms represent a sizable share of the economy already seeking this financing. The U.S. Census Bureau’s 2023 Annual Business Survey, covering 2022 data and released in December 2024, counted approximately 1.3 million women-owned employer firms, or 22.3% of all U.S. employer businesses, generating an estimated $2.1 trillion in receipts, 11.4 million employees and $508.5 billion in annual payroll.

Photo: Federalreserve · Public domain · via Wikimedia Commons