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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

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

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. 


Kanika Sinha
Kanika Sinha

Kanika is an enthusiastic content writer who craves to push the boundaries and explore uncharted territories. With her exceptional writing skills and in-depth knowledge of business-to-business dynamics, she creates compelling narratives that help businesses achieve tangible ROI. When not hunched over the keyboard, you can find her sweating it out in the gym, or indulging in a marathon of adorable movies with her young son.

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