Barriers to funding and business growth include lack of collateral and balancing family duties, a recent national poll found
As if the COVID-19 pandemic isn’t tough enough, many Canadian women entrepreneurs have been going it alone financially.
That’s one of the takeaways from a national survey of female business owners by Women’s Enterprise Organizations of Canada (WEOC), which found that more than 50 percent of respondents didn’t seek any financial assistance (loans, grants or capital investment) during the economic upheaval that was 2020.
To make matters worse, 12 percent of respondents considered seeking such support but didn’t pursue it, while 8 percent applied for funding but received none. About 28 percent sought and received some form of assistance.
Alison Kirkland, CEO of WEOC, says there are specific, systemic reasons why this pattern has emerged. “One reason is that many women are coming back to the workforce,” Winnipeg-based Kirklandexplains, referring to the break that many women take from their professional lives to have and raise children. “And they don’t have the assets to use as collateral under existing banking conditions.”
When it comes to collateral for loans, the gender divide is stark. A Statistics Canada report in 2018 found that women-owned businesses are most prevalent in the service sector (education, health, arts and entertainment, food and accommodation), while men are much more likely to own businesses in construction, transportation and warehousing.
Kirkland says this hurts women because they lack the same assets as men, such as real estate or construction machinery.
For others, she adds, applying for grants is often a long and complicated process, and there’s a perception that it won’t result in financing. Then there’s bootstrapping, which Kirkland says some women entrepreneurs see as a “badge of honour,” prompting them not to bother seeking outside financial support.
All of this can impact business success, she notes: “If you don’t have capital, you might not be able to take advantages of opportunities for growth.”
Gendered support needed
The WEOC survey found other patterns among women entrepreneurs. Eighty-six percent of respondents who had access to a women-focused entrepreneurial organization felt optimistic about the future, versus 63 percent for those who had no such affiliation
Kirkland says entrepreneurial support for women is different from support for entrepreneurs as a whole because of how they contend with gender imbalances in society. “Women still have the lion’s share of family management,” she says, “and they balance their business with child care or elder care.”
When that gendered labour is amplified by external factors—like a pandemic—the situation worsens. In Phase 1 of the survey, respondents identified a “personal or family situation” as the second-highest barrier to business growth. Meanwhile, the September 2020 Labour Force Survey noted that working mothers were more likely to miss half of their work hours compared to before the pandemic.
When you put all of these challenges together, differentiated help can make a difference, according to Kirkland. “It’s about recognizing the complexities in delivering these services,” she says, adding that organizations catering to women entrepreneurs can help make sense of the multitude of resources, deploy business advisers and even provide financing.
The right tools for the job
Kirkland has spent 17 years at the Women’s Enterprise Centre of Manitoba and is the first CEO of WEOC, which received federal assistance for its creation in 2019. WEOC is a national organization for other organizations, a parent body that helps groups supporting women entrepreneurs by creating tools and resources for them.
“We provide an extensive online library on a variety of topics,” Kirkland says of the tangible offerings for WEOC members, “and help them with resources [like business consultants or tax experts]so that they, in turn, have the tools to help in business development.”
Membership in WEOC was free until this September, but the group is shifting to a fee-based model. Members now pay $250 a year for access to resources, a nationwide network and a month-long conference in February where guest speakers address leaders of women-focused entrepreneurial organizations and give them insight that would help them support their members.
WEOC conducted its survey in two phases, in October 2020 and March 2021. The 998 respondents, aged 18-65, represented every region of the country and several sectors: services, retail, manufacturing, construction and agriculture.