Document 73: "Business/Credit," in Susanna Downie, Decade of Achievement: 1977-1987: A Report on a Survey Based on the National Plan of Action for Women (Washington, D.C.: National Women's Conference Committee, 1988), pp. 19.

p. 19

BUSINESS/CREDIT

NATIONAL PLAN GOALS:

BUSINESS: •full integration of women entrepreneurs into business-related government activities and procurement •addition of "women" to the definition of socially or economically disadvantaged groups in the Code of Federal Regulations •Small Business Administration programs to draw more women into SBA services, with particular outreach to minority women •an increase in the percentage of the annual dollar amount of procurement contracts awarded to women-owned businesses.

CREDIT: •Enforcement of The Federal Equal Credit Opportunity Act of 1974 •Nationwide education campaign to inform women of their rights under the law.

The number of women business owners has increased by 33% over 1976; there are now 3.3 million. Estimates are that half of all businesses will be owned by women by the year 2000, because women have been going into entrepreneurship three times faster than men have, in the last decade. In 1983, women owned 28% of all businesses reporting to the IRS, but accounted for only 11% of gross receipts. This discrepancy is related to the greater profitability of large, capital-intensive, full-time businesses over small, labor-intensive firms. Women-owned firms are typically small, with fewer than 20 employees, less than $100,000 capital equity, and less than $500,000 annual volume. Many are part-time and home-based, and most are in retail and service fields.

Although women own almost a third of all small businesses, they receive less than 1% of all government contracts awarded to small businesses.

But at the White House Conference on Small Business in 1986, 30% (about 200) of the 1823 elected delegates were women, up from 15% at the 1980 Conference. Most importantly, 17 out of the 50 State Delegation Chairs were NAWBO members. NAWBO presented a "Framework for the Future", and 23 of its 26 items were adopted in the Conference's top 60 recommendations.

   The National Association of Women Business Owners (NAWBO) itself has to be considered one of the success stories of the decade. NAWBO was founded in 1974, in Washington DC, by 12 women. In 1987, it has a membership of 3000, in 40 chapters nationwide, and has established itself as the voice and representative of women business owners. Growing numbers of NAWBO members are winning appointive and elective office and serving on political staffs, at the local, state and federal levels.

   Mary Del Brady, just past President of NAWBO, says worksite child care and parental leave are both important issues to NAWBO. "Framework for the Future II", which is being drafted by Virginia Littlejohn and others, and will be presented at next year's conference will be even longer range than FF 1 and includes parental leave, child care and proposals for cooperative arrangements for businesses that are too small to do some of these things on their own.

CREDIT:

   There has not been vigorous enforcement of the 1974 Act prohibiting discrimination, according to Cheryl Burke, who prepared a NAWBO report on access to credit. There are too many exemptions from some requirements of Regulation B, the implementing reg. Some banks maintain that is does not apply at all to commercial credit. There is a bill pending in Congress (one of the 22 bills in the Economic Equity Act) which would require the Federal Reserve Board to include commercial credit in its regulatory scheme.

   The Fed argued that all that was needed was an educational effort to inform women of their rights. In 1986 they published a pamphlet, which NAWBO helped to write and distribute. But the Fed has not been inclined to amend the 1974 regulations, and opposed amendments when they came up in Congress in 1986.

   The Small Business Administration did their own study of the problem and concluded that women actually had an easier time getting credit. But NAWBO members say that SBA study only looked at women who are already established in business. The problem is at the level of women who are trying to get start-up capital, who may not have much of a track record, and who may be trying to start a service enterprise and therefore need money to market their skills, not buy equipment or build inventory, for which banks more readily lend money.

   Recently, The National Association of Bank Women conducted a pilot program nationwide, in which they brought lending officers of banks together with women business owners. The lending officers got information and increased awareness about the issues, in particular the way in which traditional banking reluctance to lend start-up capital to service ventures puts women at a disadvantage; the women got training in how to get loans.

-with help from: Gene Boyer, Mary
Del Brady, Barbara Madro, Cheryl Burke, and Virginia Littlejohn, all of NAWBO.

RESOURCES:

National Association of Women Business Owners (NAWBO), 600 So. Federal St. Suite 400, Chicago IL 60605. (312)922-0465.

National Association of Bank Women (NABW), 500 North Michigan Ave., 1400 Chicago IL 60611. (312) 611-1700. Doris Payne, Exec. Director.

The American Woman's Economic Development Corp. 60E. 42nd St. Room 405, New York NY 10165. (800) 222-AWED.

Office of Women Business Owners, Small Business Admin., 1441 L St. NW Rm414, Washington DC 20416. (202) 653-8000.

   

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