Transforming finance for female-led businesses

The UK talks a big game when it comes to supporting female-led businesses, but in reality it consistently falls short of delivering results.

• Only 19% of UK businesses are led by women, yet a mere 12% of total investments target them.
• Male-led SMEs are 5 times more likely to scale up to £1 million turnover than female-led SMEs.

Why traditional financing falls short for female businesses

Research from the British Business Bank indicates that female-led businesses are more price-sensitive to the cost of external finance and see the application process and time and/or effort involved as a barrier. 

• 58% say that a further increase in the cost of credit would reduce their likelihood of applying for finance
• Women were significantly more likely to think a financing decision would take too long or result in losing control of their business.

The cost, time and collateral issues highlighted above are a direct result of the outdated underwriting models in place among legacy lenders. Banks rely on a fixed selection of data points to decide on whether to offer financing, relying on broad scale risk analysis that misses the individuality of businesses.

Your credit score, access collateral and/ or credit balance, and even size and sector, can make or break lending decisions. All because banks lack the systems to accurately understand a business’s true potential. But technology has the chance to fix this.

Opening the door for female founders to flourish

The key to open, accessible lending is to focus on the business, not the person. Modern, digital businesses have a wider range of data points available than ever before to drive decisions.

The problem is that lenders working with legacy systems can’t access them.

That’s where embedded finance is changing the conversation. 

YouLend’s decision making model is applicant-agnostic, focusing on a broad range of business metrics to create a broader picture of the health of a business, including:

• Growth
• Repeat business
• Online traffic
• Financial efficiency

By discounting any element of race, gender and background, our decision engine focuses on the unique strengths of the business, not the individual, ensuring that financing finds those who need and deserve it.

• YouLend attracts nearly 30% applications from women-led businesses, which is significantly higher than the UK average of 17%.
• YouLend dedicates 30% of its funding to women-led ventures, compared the UK average of 12%.
• 32% of YouLend's financing caters to businesses with at least one female director, with majority-female directorships receiving 29%.

Creating a future of shared success with fast, flexible and affordable business funding

The UK is sitting on a goldmine of potential when it comes to female businesses. But making the most of it requires an equal financing playing field. Ideas need capital to thrive and it’s clear that the old way isn’t working.

Partners such as e-commerce platforms, payment providers and marketplaces have made the process of starting a business faster, cheaper and more scalable – now they have the chance to do the same with financing. Working with an embedded finance provider such as YouLend can help them fill the bank-shaped void in financing and drive a more accessible future for all businesses.