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

Posted by Kanika Sinha

March 29, 2022    |     3-minute read (578 words)

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:

Performance of female-owned businesses
Metrics 2021 2020
Average annual revenues(↓) $475,707 $493,401
Average earnings(↓) $88,895 $119,654
Average expenses(↑) $386,712 $373,748
Average credit scores(↓) 580 588


Comparative analysis of female-owned and male-owned 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. 

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