Access to capital is a key tool in the start-up and growth of successful women-owned businesses. According to WIPP's 2012 National Survey of Women Business Owners, women-owned businesses continue to struggle to access capital, making an average of two attempts to obtain bank loans or lines of credit. Only 59% of WIPP members who sought outside funding last year were successful after two attempts. Those who were not successful in their attempts to get outside funding overwhelmingly identified tightening of credit at banks as the reason. For WIPP members, the majority (60%) of the funding realized in the past year was secured by home equity or other collateral. About one in seven received bank financing backed by the Small Business Administration.

1) Provide Incentives to Investors & Lenders to Small Businesses

At a time when private market lending to small businesses is low, WIPP is encouraged by SBA's guaranteed loan progress, which hit a record high in 2011. While the need for capital continues to be a top priority for WIPP members, we applaud the passage of legislation paving the way for alternatives to the traditional sources of capital, such as crowdfunding. We encourage the Security and Exchange Commission to finalize the regulatory requirements necessary to put crowdfunding in place.

We urge Congress to explore ways to incentivize lenders other than banks to invest in small businesses. Providing tax incentives to angel investors, for example, would stimulate an important source of capital. In addition, we believe Congress should lift restrictions on credit union lending to small businesses.

2) Increase Government Business Assistance for Loans

Small companies that need infusions of capital in order to grow would benefit from increased business assistance supported by the federal government. Counseling and business assistance provide small business owners with a better understanding of equity positions, potential equity partners, and terms and conditions commonly required by investors and lenders.