Census data indicate that the 5.4 million woman-owned businesses in the U.S. generate $819 billion in annual revenues. A high-profile group of international banks met in Boston recently to help those women find the money to do business. "Women-owned businesses are growing at twice the rate of all businesses," says Henrique de Campos Meirelles, Fleet Boston Financial's global and corporate president. "There's a real opportunity here for the financial system."
Fleet joined the Royal Bank of Canada, the Bank of Ireland, and Australia's Wespac Banking Corp. to form the Global Banking Alliance for Women. In their efforts to encourage women entrepreneurs and cash in on a growing market, each bank has established units for women business owners. The banks intend to share information and experiences about the best ways to help female business owners.
"You can easily meet women entrepreneurs who have been running their businesses for five years and have only financed operations through operating cash flow," says Teri Cavanagh, director of Fleet's Women Entrepreneurs' Connection, a $2 billion initiative for women business owners. "They need to understand how to leverage debt and equity to fuel the growth of their businesses, and our aim is to try to reach out and educate."
The alliance, which hopes to attract other banks, will focus on in-house training programs so employees can be encouraged to develop effective relationships with women entrepreneurs. Says Cavanagh: "Women want to be taken seriously when they apply for credit."
The alliance's main objectives will be to encourage entrepreneurship among women and help overcome inequity in the distribution of startup capital. According to Fleet, women received just 4% of the $48 billion of venture capital raised in the U.S. last year. And banks still lack effective startup financial products that aren't based on personal credit, which can be problematic for women, who often disrupt their careers to have children.
By Naween Mangi in New York