NatWest has today announced an additional £1 billion in funding to help support female-led businesses in the UK recover from the coronavirus. The aim is to ultimately help female entrepreneurs scale and grow, and builds on the £1bn announced last January, which was the largest intervention by a UK lender focused specifically on female-led businesses.
The bank has also committed to help create an additional 35,000 new businesses in the UK by the end of 2021, focusing its efforts on underrepresented groups and geographical inequality.
Due to the extraordinary impacts of the coronavirus the bank has seen unprecedented demand from female-led businesses and has exceeded its £1bn target 4 years ahead of plan. The availability and ease of access through digital channels of the Government lending schemes, combined with virus impacts, has led to many more female entrepreneurs applying for funding. The share of lending to female founders has not only increased in absolute terms, but proportionately rising from 9.5% to 14% of total lending.
A central finding of The Alison Rose Review of Female Entrepreneurship (‘the Rose Review’), was that the single biggest issue holding female entrepreneurs back is the lack of funding directed towards them. Traditionally women are less likely to take on debt than male-led businesses and this can impact their ability to scale and grow at the same rate. The increased engagement stimulated through the Government schemes has also allowed NatWest to ensure that female entrepreneurs gain access to this overall package of support.
The additional funding will be open to both new and existing customers and represents new lending into the UK economy, to continue to close the gap between female and male entrepreneurs. Support and encouragement for female entrepreneurs is needed more than ever due to the disproportionate impact of the crisis on women. Recent research commissioned by NatWest in conjunction with YouGov shows that:
- 1 in 10 female entrepreneurs plan to start a business in 2021;
- 55% of female business leaders would not recommend starting a business in their sector in 2021;
- Female entrepreneurs and business owners are 17% more likely to struggle balancing business with family life during the pandemic; and,
- Nearly three quarters (71%) of female business owners and entrepreneurs found managing their business stressful during the pandemic, compared with just over half of males (55%).
NatWest Group CEO, Alison Rose, commented:
“As we build a purpose-led bank that champions the potential of people, families and businesses up and down the country, we are committed to supporting the UK’s recovery from the crisis. However, if women find themselves at even more of a professional disadvantage on the other side of this crisis, then we’ll be attempting to build an economic recovery whilst ignoring a huge area of potential.
“All of us, from ministers to employers, have a duty to ensure that further pain isn’t felt disproportionately by women and that anyone who retains an ambition to start or grow a business is helped with targeted and innovative assistance. We’re determined to play our part and I’m pleased to confirm that we are now able to launch a second £1bn tranche of funding to continue and extend our support to female entrepreneurs and business owners.”
Small Business Minister and Co-Chair of the Rose Review Board, Paul Scully added:
“We want to make the UK the best place in the world to start and grow a business and that means backing entrepreneurs from all walks of life, regardless of gender or ethnicity.
“It is fantastic to see a large company like NatWest doubling its support for female-led businesses to £2bn, giving a lifeline to thousands of companies as we build back better from coronavirus.”
Martin McTague, Policy Director of the FSB commented: “FSB research shows women-led small businesses are less likely to access any form of external finance than their male counterparts, with a quarter of women business owners telling us that the ability to access finance is a key challenge to starting their own business. Dedicated funds like this, promoted to current and potential small business creators, could make a real difference.”
Hannah Essex, co-executive director at the BCC, said: “There is no questioning the talent and capability of so many women who want to set up and run their own businesses in the UK. It is vital that these brilliant women are supported with the investment they need to get their ideas off the ground. As the UK gradually emerges from the pandemic then this additional financial support will be a welcome boost to female entrepreneurs looking to lead the economic recovery.”
The Female Entrepreneurship Funding builds on a number of initiatives that the bank already has in place to support women looking to start, scale and grow their businesses. The NatWest Accelerator hubs have supported over 1,230 entrepreneurs of which 43% were female and NatWest’s ambition is to help create an additional 35,000 new businesses in the UK by the end of 2021 – focusing efforts on underrepresented groups and geographical inequality. In addition, the bank aims to support 200,000 people to consider starting a business in 2021, of whom 60% will be female and 20% will be from a Black, Asian and Minority Ethnic background.
To support the UK’s recovery from the Coronavirus, in partnership with the FSB and British Chambers of Commerce, the bank has established an SME Transformation Taskforce that meets today. The Taskforce brings together policymakers, business groups and small businesses to identify the barriers that can be removed to support recovery and future growth. Alongside the British Growth Fund, we have established The UK Enterprise Fund that enables Coutts’ clients to invest in diverse and high-potential growth economy companies across all regions of the UK.