Congress’ Cuts Harm Women Entrepreneurs

Antonella Pianalto
Aug 22, 2017 · 3 min read

Recent reports find that total entrepreneurial activity in the United States has fallen by more than 10 percent in the last several years. This is likely due in part to post-recession apprehension, but perhaps a greater contributing factor rests with the wide array of challenges that exist for prospective business owners. Among other things, a lack of resources, limited training, lack of banks willing to provide a loan, and of course, the innumerable regulatory hurdles are stifling growth.

At a time when entrepreneurship is stagnating, women business owners are driving the American economy forward. Between 2007 and 2016, the number of women-owned businesses increased by 45 percent.

According to an annual report on women’s business ownership, women are launching businesses at five times the rate of the national average, contributing to a collective gross domestic product of $1.6 trillion. As employers, women are responsible for nine million American jobs, with an economic impact that translates into the creation and maintenance of 15% of the entire U.S. workforce. In fact, according to the study, if U.S.-based women-owned businesses were their own country, they would have the 10th largest GDP in the world, ahead of countries like Canada, Mexico, and even Russia.

Women entrepreneurs have proven the ability to stimulate economic activity and benefit all industries throughout the United States.

Why then, with such promise from women business owners, does the U.S. House of Representatives choose to cut funding to one of the very programs contributing to these gains? In their funding bill for fiscal year 2018, the House Appropriations Committee cut annual funding allocated for Women’s Business Center program by a full one million dollars.

Such a drastic cut would lead to fewer centers (decreasing the availability nationwide) and less funding for each center, which decreases their impact. Moreover, this completely wastes the increase in fiscal year 2017 funding — stripping funds from centers right after awarding new funding just two months ago. This is inefficient government and it removes certainty from these centers’ ability to plan their expansion of services.

The Senate now has an opportunity to ensure this program receives the resources it needs. Here is why it should.

Women’s Business Centers operate more than 150 locations across 48 states and Puerto Rico. In 2016, they served nearly 150,000 entrepreneurs through training and counseling, generating 17,000+ new businesses. The most recent annual data shows Women’s Business Centers have helped secure roughly $500 million in financing.

In addition to important training and counseling, many WBCs provide direct loans and more than 75 percent help in procuring government contracts. Many offer support in various languages, totaling more than 35 languages overall. Women’s Business Centers also reach many women in underserved communities. On average, each WBC serves about 1,300 entrepreneurs and aspiring entrepreneurs annually at a nominal cost of only $137 per entrepreneur. Roughly 80% of those who received training found it “useful or very useful.”

Not only do they help new businesses launch, they also help established businesses grow. Women’s Business Centers share entrepreneurial best practices — from approaching government or foreign markets to leveraging technology for administrative tasks. The shared successes and avoidance of pitfalls allows WBCs to facilitate networks of entrepreneurs who can rely on one another. These networks, in addition to the resources, are key to women business owners, who have often described the challenge of not having the same support network for counseling and capital as male entrepreneurs.

The burgeoning network of women’s enterprise is having a historic impact, considering that in 1970, only 5% of businesses were women-owned. Today that number is at 38%.

It is for these reasons and others that the WBC program has for years received bipartisan support. Moreover, the House just passed legislation expanding the program, pointing to its ongoing success at job and wealth creation. The new administration and Congress — regardless of party — have touted their commitment to women entrepreneurs. It’s time to put their money where their mouth is.

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Antonella Pianalto

Written by

President and CEO of the Association of Women’s Business Centers (AWBC)

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