Entrepreneurial financing relationships: how does gender matter?

Financing is cited as the major obstacle for entrepreneurs. However, data limitations have prevented study of entrepreneurs’ own impact on their financing relationships. Gender-based studies have concerned lender constraints and discriminatory outcomes. Others which are generally examined are borrowers’ fear of denial and non-pursuit of credit. To more fully explain the financing obstacle, the purpose of this study is to uniquely examine entrepreneurial borrowers’ evaluation of and actions in their existing financing relationship. This study also captures those businesses with equal ownership gender concentration, to contribute to a deeper understanding of gender impact.

This study uses a cross-sectional sample of several thousand US small enterprises from the NFIB’s proprietary credit survey. The data set offers links between owners’ perceptions and financing behavior. Robust univariate analysis examines differences across gender ownership groups. Multivariate regression analyzes how gender, business environment and other factors determine the entrepreneurs’ financing relationships.

This study highlights how entrepreneurs affect their own financing outcomes. Findings suggest that switching lenders, seeking multiple relationships and other actions determine financing satisfaction. Growth intent, business performance and characteristics of the entrepreneur are among significant posited factors influencing perception and behavior of entrepreneurs in their financing relationships that drive business performance. Furthermore, equal ownership concentration firms appear to be similar to those primarily owned by men. This study indicates that researchers need to further delineate among entrepreneurs. The results of this study also have implications for policy-makers in their assessment of gender discrimination and government entrepreneurial financing initiatives.

Financing is cited as the major obstacle for entrepreneurs. However, data limitations have prevented study of entrepreneurs’ own impact on their financing relationships. Gender-based studies have concerned lender constraints and discriminatory outcomes. Others which are generally examined are borrowers’ fear of denial and non-pursuit of credit. To more fully explain the financing obstacle, this study uniquely examines entrepreneurial borrowers’ evaluation of and actions in their existing financing relationship. This study also captures those businesses with equal ownership gender concentration, to contribute to a deeper understanding of gender impact.