As Revenue of Women-Owned Businesses Rose, Credit Scores Dropped in 2018

March 7, 2019

Analysis of 30,000 Companies Finds Average Annual Revenues Up While Credit Scores and Loan Amounts Drop

NEW YORK, NY, March 7, 2019

The number of women-owned businesses that applied for funding in 2018 increased by 13 percent, although their funding amounts went down, according to an annual study of women-owned companies by Biz2Credit, a leading online credit provider for businesses.

Women Study

The study, which included 30,000 companies nationwide in over 20 industries - including retail, healthcare, hospitality, construction and professional services, among others - revealed that the average loan amount for women-owned companies was $48,341 last year. The most common type of funding provided to these companies was working capital for business expansion.

Additionally, the study found that while average annual revenues increased, credit scores for women business owners and the average age of women-owned companies applying for small business loans both dipped.

Volume of Applications

Volume of Applications

qg-1 Small business owners were willing to take more risks in 2018 because the economy was very strong," said Biz2Credit CEO Rohit Arora, who oversaw the research. qg-2

Rohit's Takeaways from the 2019 Women-Owned Business Study

Rohit Arora

Rohit Arora
CEO Biz2Credit

Rohit's Takeaways from the 2019 Women-Owned Business Study

qb-1 "2018 was a good year for the economy and for small business owners in particular. Revenues and earnings both rose for women-owned businesses last year, which means women entrepreneurs are succeeding."

"Women-owned businesses showed lower credit scores (588) last year than they did in 2017 (598). The age of businesses also dropped. This shows us that more women are starting businesses and choosing to apply for financing. It also appears that women who start their own businesses are potentially fueling their business growth with personal financing, affecting their overall credit."

"Loan applications from women business owners were highest in states where technology and construction are on the rise, such as California, Texas, New York, Georgia, and Ohio. This is a sign that many women are starting companies in traditionally male-dominated inustries, which is an excellent sign." qb-2

Women-to-Men Borrowing Ratio

Women-to-Men Borrowing Ratio

qg-1 Women business owners who might have previously held off on applying for credit for expansion or capital improvements, increased their borrowing last year. Record high optimism and the strong economic tailwinds of 2018 supported the growth of small businesses. qg-2

Average Credit Scores

Average Credit Scores

Biz2Credit found that the Average credit scores for women-owned businesses dropped from 598 in 2017 to 588 in 2018 and trailed the scores of their male counterparts (613) by 25 points.

qg-1 When we take a macro look, women are increasingly becoming entrepreneurial and are applying for loans at earlier stages of their companies' life cycles," added Arora, whose firm has arranged more than $2 billion in financing for small business owners in the past decade. "Their credit scores often are lower because of both the wage gap and the higher amounts of student loans that they are paying off." qg-2

She Leads Media Insights

Adrienne Garland

Adrienne Garland
Women's Leadership Expert

What is the biggest challenge that women entrepreneurs face that men do not?
Two Challenges are universal when it comes to entrepreneurship - creating the right product or service to launch, marketing it appropriately to the right audience, hiring great employees, keeping costs down, etc. However, one real challenge that women face is more difficultly in gaining access to financing. It's common knowledge that only 2-3% of all venture capital financing goes to women, and women are more likely to finance their startups with credit card debt, which can negatively impact their credit scores, making it more difficult to gain access to traditional bank and SBA loans. This sets up a cycle where women cannot gain access to the financing they need to grow their companies, so these companies don't grow as quickly or as large as companies who have better access to funding. This is a huge challenge.

What are the two or three most important steps that women can take when they want to start their own business?
I would say do your research on your product/market fit. It's critically important to be passionate about your business, but if there is not a market for your product/service, and people are not willing to pay for your product/service, it doesn't matter how passionate you are. The second step would be to get smart on your numbers, and get comfortable with financial literacy in general. I often hear women say that finance 'isn't their thing' or that they are 'not good with math'. This outlook can harm a business in the long term, as it is critical to business growth and profitability. Women (and men) need to know their product, their service, their sales, marketing, operations AND finances better than anyone else. It's fine to seek help to gain this understanding, but it's not okay to give away that type of power and to claim ignorance out of the fear of numbers.

How would you advise a woman who runs her own business to approach getting funding? What does she need to focus on?
My advice would be to know your numbers - past and present revenue, expenses, future sales, operational expenses, any changes (opportunities or threats) to your business viability and your cash flow, as well as your credit score. Plus, don't forget to know exactly what you will be using the financing for, and how that will help you to achieve your business objectives. In growing a business, there are a thousand things that require focus - but the most important thing in any business is to serve your customers, and serve them well.

Average Annual Revenues

Average Annual Revenues

At the same time that credit scores dropped, average annual revenues of women-owned business rose approximately 13 percent from $202,491 in 2017 to $228,578 in 2018, according to Biz2Credit, which analyzed 30,000 applications from business owners through its online platform last year.

Meanwhile, businesses owned by men in 2018 generated about 7 percent more revenue ($473,157) than they did in 2017 ($444,227), and made $244,579 more revenue on average than women-owned businesses last year.

qb-1 The economy in 2018 was among the strongest on record. Optimism among small business owners was the highest ever recorded and, increasingly, business owners were willing to take risks. Businesses owned by women continue to grow quickly, qb-2
Average Loan Size

Average Loan Size

The Biz2Credit research found that the average funded amount for women-owned businesses ($48,341) was 31% less than the same for Men-owned businesses ($70,239) in 2018.

qg-1 Funded amounts were lower for both men and women in 2018. This can be attributed, in part, to the high number of SBA loans granted this year. Increasingly, because of the government guarantees that come with SBA loans, banks were willing to lend money to businesses than might not otherwise qualify for traditional bank term loans.

Additionally, younger businesses might be more conservative in asking for money and seem to be more carefully managing their growth. qg-2

Average Operating Expenses

Average Operating Expenses

For women-owned Businesses was (51%) less as compared to their male counterparts in 2018.

Average Operating Expenses

Industry Sectors

Nearly one-in-five loan applications from women-owned businesses were in the services sector (excluding public administration). Biz2Credit found that industries in this sector like translation and public relations services, as well as hair salons, nail salons, and cleaning firms, were most common among women-owned businesses at 19.7% of applications, followed by retail (18.2%). Other industries for which there were the highest percentage of loan applications were: accommodation and food services (14.3%), healthcare and social assistance (7.6%), and construction (6.4%).

CASE STUDY Maryam Zadeh

Industry Sectors

Maryam Zadeh



Even though women-owned businesses are growing, the findings indicate that they still face challenges, especially when the company is in a male-dominated industry. For instance, Maryam Zadeh, owner of the trendy HIIT BOX gym in Brooklyn, NY, had strong personal credit scores and a growing customer base, yet still found it challenging to secure funding.

qw-1 We're a pioneer in Brooklyn with a boutique fitness gym. I can get press and have a level of notoriety, but often lenders will ask me where my male partner is, said Zadeh, who has twice moved into larger spaces because of the growing customer base for her high intensity interval training. "Like any other business, we need growth capital. qw-2

She recently secured a bridge loan that enabled her to secure a larger space in the Gowanus section of Brooklyn, a once gritty area that is now booming with small businesses just like hers. Zadeh says the solid offering of her business, her growth rate, and the positive publicity she has received were helpful in securing funding.

qw-1 We are adding to our customer base, but with that growth comes increased costs, including front desk help, salaries and other costs," Zadeh says. "There is always something to spend money on during a growth phase. qw-2

Average Age of Business

More women have launched their own businesses in recent years. The average age of women-owned businesses was lower in 2018 than in 2017.

  • women-men 43 Months
  • Average Age of Business
  • 52 Months
  • women-men

The Top Five States For Applications

According to Biz2Credit figures, the top five states for applications from women-owned businesses were California (13%), Texas (11%), New York (6%), Georgia (6%), and Ohio (5%).

  • California
  • Texas
  • Georgia
  • New York
  • Ohio

"We have seen the most funding requests from women-owned businesses coming from technology centers like Silicon Valley, Austin, Texas, and New York City, areas where the real estate markets are also booming,"

Key findings:

  • Volume of Applications from women-owned businesses were 28.8% of the applicants in 2018.
  • Average Annual Revenues of women-owned business rose to $228,578 in 2018, an improvement of 13% over 2017.
  • Average Credit Score for women dropped ten points from 598 in 2017 to 588 in 2018.
  • States where the greatest number of loan applications from women-owned businesses originated were: California, Texas, New York, Georgia, and Ohio.
  • Industry Sectors: Services (except Public Administration) represented almost one-in-five (19.7%) women-owned companies in the study. Other top industries included Retail, Accommodation and Food Services, Health Care and Social Assistance, and Construction.

Comparing: Women-owned vs. Male-owned Businesses

  • Women-to Men Borrowing Ratio: 28.3% vs 71.7% registrations on in 2018.
  • Average Annual Revenue Gap women-owned businesses ($228,578) earned $244,579 less on average than male-owned firms ($473,157) in 2018.
  • Average Credit Score: On an average the credit score for women-owned businesses (588) were 25 points lower than male-owned Businesses (613) in 2018.
  • Average Loan Size for women-owned businesses ($48,341) was 31% less than the same for Men-owned businesses ($70,239) in 2018.
  • Average Operating Expenses for women-owned Businesses (51%) less as compared to their male counterparts in 2018.
  • Average Age of Business (in months): 43 vs 52 for male-owned companies (the average age of business in months was lower for women-owned companies in 2018).

About Biz2Credit

Founded in 2007, Biz2Credit has arranged more than $2 billion in small business financing and has several times been named to Crain's New York's Fast 50 and was ranked among the top 200 fast-growing companies on Deloitte's 2017 Technology Fast 500. Biz2Credit is expanding its industry-leading technology in custom digital platform solutions for leading banks and other financial institutions, investors and service providers in the U.S. Visit or follow Biz2Credit on Twitter: @Biz2Credit, Facebook, and LinkedIn:

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