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Women are at the center of the American economy. They make up nearly half the workforce and own an estimated 42 percent of all U.S. businesses. Before the pandemic, these women-owned businesses employed 9.4 million workers and generated $1.9 trillion in revenue. Businesses owned by women of color were experiencing exceptional growth. Pre-COVID, firms owned by women of color grew at 43 percent, one of the fastest rates among all groups. But the virus has caused a monumental setback to women’s careers, earnings, and the progress that has been made over the past half-century. 

The pandemic has been incredibly hard for small firms, closing more businesses in 2020 than any other year on record. As of May of 2021, more than 37 percent of small businesses have closed their doors. Unfortunately, women-owned businesses have borne the brunt of this economic devastation. Throughout the pandemic, female entrepreneurs have been more likely to close their businesses and report a significant decline in the overall health of their companies.

COVID also dealt a severe blow to the progress that women have made in the workforce. In just two months, from February to April 2020, women lost a staggering 12.2 million jobs. Overall, women lost their jobs at rates 24 percent higher than men. Today, many have yet to start working with 1.8 fewer women in the labor force than pre-pandemic.  

Simply put, the pandemic was a travesty for women small business owners and their female employees. But disproportionate challenges are nothing new for female entrepreneurs. There have long been numerous structural obstacles facing women in areas pivotal to business success. 

Women historically have a much harder time obtaining the capital needed to start and run a business. Only about 24 percent of small businesses bank loans go to female entrepreneurs. When women do obtain loans, the average amount is 33 percent less than their male peers. This lack of access to traditional lending forces women to rely on family connections or self-finance their business.

Female entrepreneurs also have less access to the resources and support systems that can mean the difference between success and failure for an enterprise. There is a strong relationship between technical assistance, confidence, and a positive success rate for small firms. Inadequate resources for core support programs can hurt some women entrepreneurs who need technical assistance and create more hardships for those already struggling with gaining business funding. 

A strong recovery from this crisis will depend on helping female entrepreneurs rebuild and getting women back in the workforce. This requires a deliberate investment in initiatives that drive and support female entrepreneurship.

Today’s hearing will allow us to examine what is working, and what changes Congress can pursue to ensure that we are meeting the needs of women small business owners.

It’s not enough to recreate the pre-pandemic economy for female workers and business owners; we must build back better.

By unleashing the full potential of female entrepreneurship, we can create a more equitable, balanced, and prosperous economy.