Financing business expansion

Financing business expansion

Women also tend to raise smaller amounts of capital also when it comes to financing business expansion.Moreover,they rely more heavily on internal than on external sources of capital.The lower use of outside financing can deprive women-owned enterprises of the capital needed to innovate, develop new products and services,hire key employees and grow.It is important to distinguish demand side and supply side explanations for the financing gap of women led firms.On the demand side, female owners traditionally operate in sectors at lower capital intensity and at a lower scale this partly explains their lower propensity to seek external funding. women were highly concerned by the issue of “keeping control” of their business, and are thus less attracted by equity financing.Evidence from the United States shows that women are more likely to be discouraged from applying for loans for fear of rejection, though they are no more likely to be denied when they do apply.This lower confidence is partly driven by lack of familiarity with finance and accounting practices.