Biz2Credit announced on Tuesday that its latest study revealed that the average annual revenues of women-owned businesses increased 47 percent and average annual earnings jumped 61 percent last year among companies that applied for funding through its online credit marketplace.
The company reported the average annual revenues of women-owned business rose to $210,000 in 2016, an improvement of 47% from $142,804 in 2015, according to Biz2Credit, which analyzed 25,000 applications from business owners on its platform during 2016. In comparison, businesses owned by men generated about 73 percent more revenue ($363,414) on average than women-owned businesses in 2016. Meanwhile, Average annual Earnings for women-owned businesses were $117,064, a 61 percent increase, while male-owned firms averaged $195,574 — a $78,510 differential between the genders. Rohit Arora, CEO of Biz2Credit and who oversaw the research, stated:
“Overall, the figures show that 2016 was a strong year for small businesses — revenues were up significantly. However, there is still a large gap between the sales of male-owned and female-owned companies. It is encouraging that women entrepreneurs are acquiring credit at nearly the same dollar amount of their male counterparts. This indicates a commitment to growth of their companies.”
Biz2Credit also noted the study found that the average credit score for women-owned businesses dropped four points from 599 in 2015 to 595 in 2016. At the same time, credit scores, on average, were 17 points higher for businesses owned by men, 612 in 2016, a drop from 615 in 2015. Arora explained:
“The drop in credit scores might initially seem surprising, but in a way, it’s an encouraging figure. Borrowers who cautiously refrained from borrowing money for expansion or capital improvements re-entered the credit markets. Because the economy was relatively strong and interest rates were so low, women business owners were willing to take on more risk.”
Biz2Credit went on to share 29 percent of the registrations on its platform came from female entrepreneurs, up from 27 percent in 2016. Arora added:
“A solid economic recovery along with very low interest rates created an atmosphere in which small business could thrive. In a strong economy, women entrepreneurs sought funding to grow their operations.”