Image caption: Sue Barnard.
10th August 2020
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Sue Barnard, Senior Manager at the British Business Bank talks about how the pademic could mark a new era in funding for female founders.
The global Covid-19 pandemic has entirely transformed the way that we think about business investment and growth.
As we consider new approaches to reinvigorating the economy, this could be the perfect opportunity to increase support for female entrepreneurs and facilitate a significant economic boost. Up to £250 billion could be added to the UK economy if women started and grew new businesses at the same rate as male founders, according to the Alison Rose Report.
However, significant strides need to be made before we unlock these benefits. The pandemic has exacerbated the existing gender gap in many ways, and there is undoubtedly a lot more that needs to be done to increase the number of female entrepreneurs of all backgrounds that begin their own businesses. Boosting access to finance is a key part of this, and last year, the British Business Bank highlighted that for every £1 of venture capital (VC) investment made in the UK, all-female founders receive less than 1p.
As economic recovery becomes a focus, one crucial aspect of the conversation must be about how we can support female entrepreneurs to grow their own businesses.
Providing greater access to finance
Following lockdown, business growth has moved to the top of the UK government’s agenda, which means that there is now a range of support schemes in place for businesses of all sizes.
The Coronavirus Business Interruption Loan Scheme (CBILS) is just one example of a new type of support available for businesses. There are many other funding options for businesses in all sectors, such as £400m Northern Powerhouse Investment Fund, which is specifically aimed at supporting businesses in the North of England.
The last few months have also changed the way that founders think about finance – in many cases, rather than being only a possibility, it has become a necessity. This combination of factors means that, here at the Northern Powerhouse Investment Fund, we’ve seen a positive upwards trend of more female founders applying for finance.
This includes Redwigwam, a company that provides a database of flexible workers for businesses, whose team recently secured investment from NPIF – Maven Equity Finance to expand. This is a positive indication that entrepreneurs are increasingly seeking funding to scale-up in the coming months.
In many cases, businesses are seeking funding to diversify their offering and adapt to the new normal. The recruitment firm Fresh Perspective, set up by two sisters, sought NPIF funding backed by CBILS to help the business expand its services and train candidates and businesses virtually.
Now is a perfect time for business leaders to take a step back and focus on their strategy in the long-term, as well as for the remainder of 2020. Entrepreneurs should look at their goals and growth ambitions and assess how finance could play a part in achieving these.
Building a support network
Along with financial support, now more than ever is the time for female founders to tap into the North’s close network of entrepreneurs and mentors. This could mean seeking business advice from their local Growth Hub to access national and local business support across the UK, or taking advantage of one of the many virtual events and training sessions available flexibly online.
The provision of mentoring schemes and scholarships can also help entrepreneurs to consider and plan out funding options, form long-term strategies and widen access to growth to women of all backgrounds.
As the economy recovers, it’s important for founders to consider the steps that they can take to ensure that their business thrives, as well as survives, in the months and years to come. Whether it’s through access to funding or seeking advice from business leaders in the region, providing greater support for female entrepreneurs will unlock a significant economic boost, and ultimately create an even more diverse and thriving business community in the region.
The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.
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