Study probes why female-owned businesses fared worse than male-owned businesses during 2021

The findings of a 2022 Biz2Credit Women-Owned Business Study paint a dismal picture of the performance of many female-owned businesses during 2021, revealing declining revenues coupled with rising expenses. 

The study further suggests that the effects of the COVID-19 pandemic in 2021 were harder on female-owned companies, many of which have been historically less well-funded compared to male-owned firms.

Key findings

The study analyzed 100,000 firms from across the U.S. for the entire year of 2021 to garner insights into the financial performance of female-owned, small- to mid-sized companies. Here are the study’s key findings:


• The average annual revenue for female-owned businesses posted a 4% dip while expenses went up by 3%.


• The average earnings (that is, the difference between annual revenue and operating expenses) of female-owned businesses decreased by 26%.


• Texas registered the most business loan requests from female-owned businesses, at approximately 10.84%.


• Services emerged as the top industry in the survey, representing close to 31.93% of the female-owned companies.


Here’s a more comprehensive look at the performance of female-led businesses:

When weighing the performance of female-owned and male-owned businesses for the stated period, the data underscores a larger problem: Female-owned companies posted a revenue gap, earning $199,936 less on average than male-owned firms in 2021. 


Further, while the average annual revenue for female-owned businesses declined by 4%, those of male-owned companies experienced a decline of only 2%.


Women were outpaced by male-owned businesses in other parameters as well. For instance, their average loan size was a staggering 41% lower than the average loan size for businesses owned by men.


Here are some specifics from the study:

Metric	Female-owned businesses	Male-owned businesses
Women-to-men borrowing ratio	33%	67%
Average annual revenue	$475,707	$675,643
Average credit score	580	594
Average loan size	$49,712	$83,198
Average age of business	4 years (45 months)	4 years (48 months)

Even Round 2 of the Paycheck Protection Program, wherein Congress appropriated $284 billion for small business COVID-19 relief, exhibits a similarly disconcerting picture of female-owned businesses. Perusing data from PPP loan applicants, the study finds that 49% of the applicants for PPP Round 2 were female business owners. But the average approved amount for these female entrepreneurs on the Biz2Credit platform was just $23,101, in contrast to $36,348 for those applicants who identified as male business owners.

Other findings

By geography: Texas produced the most business loan applications from women-owned companies, followed by Georgia, Illinois, Florida, California and New York.


By industry: Almost one-third of the female-owned companies that applied for business loans during 2021 were in the services industry (except public administration). Here’s a more detailed look at the related Biz2Credit figures:

Sector	Female loan applicants
Services	31.9%
Retail	15.07%
Accommodation & food services	9.07%
Health care & social assistance	7.41%
Transportation & warehousing	5.44%
Arts, entertainment & recreation	4.66%

Wait, there’s a brighter side too

Although average annual revenue for female-owned businesses dipped, one of the reasons is that women founded new startups at a higher rate during the COVID-19 pandemic. Further, the average age of female-owned businesses also declined — from 56 years old in 2020 to 45 years old in 2021.