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Bridging the Investment Gap: Alternative Lenders Supporting Women in Business

Shaping the business landscape is a tale of two halves for women-led enterprises – On the one hand entrepreneurial women play a definite role in contributing significantly to the UK economy. On the other, barriers to growth are still frequently recognised, hindering this impact. Here, FDC and Mercia explore how alternative finance investors can bolster women in business.

In today’s evolving business landscape, women are taking the helm of an ever-increasing portion of UK-based companies, asserting their entrepreneurial spirit and innovative prowess.

According to the recent Rose Review progress report* just over 20% of UK businesses are spearheaded by women – though this figure is still three times lower than their counterparts led exclusively by men. Yet, in the face of this disparity female founders remain undeterred. Their relentless drive toward achieving a more equal balance not only empowers their ventures but also holds the potential to see an additional £250 billion added into the UK economy.

Overcoming challenging waves

Despite the increasing prevalence of women-led businesses in the UK, many still encounter pronounced obstacles when aiming for growth, particularly in terms of accessing external finance. Reportedly, 50% of women business leaders found accessing investment hard in the past 12 months*. A blend of systemic biases, historical norms, and lack of general support within a male-dominated financial sector can inadvertently create barriers for female entrepreneurs.

Additionally, the lack of representation of women in high-level financial roles means fewer female voices influencing lending and investment decisions. This combined lack of advocacy and unintentional biases can lead to women securing smaller loan amounts or facing more stringent terms, making their journey towards business expansion more arduous.

Steering attitudes and bridging gaps

Access to investment and the right finance provider can have positive influences on the business performance. Alternative funders like Frontier Development Capital and Mercia Asset Management take a holistic view on a business’ situation and provide ‘more than money’. They can often give the clarity a business needs by advising on management concerns and support a business to achieve core goals.

Under the visionary leadership of its influential female CEO, FDC is at the forefront of flexible debt investment into UK SME businesses. With a diverse team where both men and women hold pivotal investment relationship roles, FDC supports strong business growth plans and management teams without prejudice, encouraging any business looking for flexible investment to get in touch.

Sue Summers, FDC CEO said: “We recognise the potential and value that women leaders bring to the table. By offering more than money we ensure that businesses not only gain financial support but also benefit from the vast array of experience and insight from the team, their networks and beyond.

“Having access to flexible debt investment is key to enabling business growth and we encourage SMEs to speak to our team to discuss growth ambitions and concerns.”

Part of Mercia Asset Management, FDC provides tailored and flexible debt investment over £1m for growth capital and shareholder transactions.

Rise and Thrive

One of the main concerns for entrepreneurial women is that they are less likely to have a well-rounded network of other business leaders, mentors, and professionals to lend advice and guide.

To bridge this relationships gap, Mercia recently launched “Rise and Thrive” – a programme specifically targeted at women decision makers who find getting access to growth capital challenging. Offering support and training to scale their companies, topics covered include understanding and working with bias, navigating the investment framework, breaking down imposter syndrome, and accessing networks and mentors.

Angela Warner, Managing Director of Mercia Investments said: “Mercia is passionate about finding and supporting scalable growth companies across the UK. However, we are acutely aware that woman entrepreneurs, for many reasons, often fail to access the capital they need to take their businesses to the next level. We hope that by creating these workshops held across the UK we can offer practical support and instil confidence in a new network of talented founders to take that next step on the funding ladder.”

Mercia Asset Management is one of the UK’s most active SME finance providers. The half-day workshops are being offered as part of Mercia’s commitment to responsible investing open to founders and senior leaders of scaleup businesses, with its next November session being held in Manchester.

Gender inclusivity

By acknowledging the challenges faced by women-led SMEs in securing finance, steps can be taken to even the balance, offering a more supportive funding environment for those trying to access the capital they need to grow.

Often, the finance industry is seen as male-dominated, which can be intimidating for some business leaders.  

However, funders like FDC and Mercia foster a culture of inclusivity, tapping into the rich diverse talents, creativity, and perspectives of women within their investment teams. By increasing the representation of women in investment and leadership positions, accessing finance becomes a more equal playing field and drives innovation for the UK.

Kathryn Hoverd, FDC Investment Manager said: “Efforts are underway to increase diversity within the lending landscape and provide support to underrepresented entrepreneurial business leaders. Initiatives such as the Investing in Women code, and the Rise and Thrive programme actively promote inclusivity. We encourage anyone looking to grow their business to reach out and join our networks to work towards bridging, and finally closing, the investment gap.”

In conclusion, while statistics underline the disparities faced by women leaders, it is clear the narrative is beginning to shift towards the importance of actionable support and meaningful investments. Alternative funders like FDC and Mercia continue to commit to nurturing and financially supporting women-led SMEs. For the UK economy, this support isn’t just desirable – it is essential.

If you’re a leader of a UK SME looking to grow your business or would like more information about Mercia’s Rise and Thrive programme email the team at marketing@frontierdevelopmentcapital.com and start the conversations today.

 

* NatWest Group - The Alison Rose review of female entrepreneurship 2023 report 

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