Female business owners in the UK are facing significant hurdles in pursuing their growth plans, largely due to the impact of high interest rates, according to recent findings from Tide, the UK’s foremost business financial platform. The release of the Female Business Owners UK Index by Tide sheds light on the challenges confronting women as they endeavor to establish and expand their businesses.
The survey conducted by Tide, revealed that more than a third of female entrepreneurs have had to put their growth plans on hold, citing the burden of high interest rates as a primary obstacle. With interest rates at approximately 5% in the UK, 38% of respondents reported freezing their growth initiatives, while an additional 37% expressed difficulties in managing cash flow effectively.
Out of the 458 women who participated in the survey, an astonishing 74% recognized that their businesses had been negatively impacted by high interest rates in the last six months. For many of these entrepreneurs, the challenges extend beyond short-term financial management; 40% struggle to formulate long-term plans, and 21% find themselves allocating a significant portion of their profits towards servicing loans.
The survey also identified other economic factors contributing to the strain on female-led businesses, with inflation (38%), energy costs (25%), and challenges in accessing finance (25%) cited as additional barriers to growth and sustainability.
Despite these substantial challenges, the majority of respondents maintain optimism regarding their business prospects in 2024. An impressive 74% expressed positivity about the year ahead, with nearly one in five anticipating significant revenue growth.
However, personal challenges continue to impede the progress of female entrepreneurs, with issues such as low self-confidence (33%), struggles with perceptions of credibility as business owners (26%), and the lack of support in managing caring responsibilities for children or elderly relatives persisting as significant barriers to success.
Heather Cobb, SVP Member Engagement at Tide, said: “Today we’re launching Tide’s first Female Business Owners Index which highlights the challenges facing women when starting and growing their businesses. In the UK, participation of women in entrepreneurship remains stubbornly low compared to other advanced nations.
“Our research shows high interest rates create additional barriers for fledgling female entrepreneurs already struggling with issues like childcare and low self-confidence. I’m delighted to see that Tide’s female members are positive about 2024, however, we’re also calling on the UK to do more to encourage and nurture female entrepreneurs – especially as major political parties prepare for an election year.”
Tide has pledged to tackle these obstacles head-on through its content program, aimed at promoting gender equality and removing barriers to female entrepreneurship. The company has set ambitious targets, aiming to assist 200,000 women in the UK and 500,000 women in India in launching new businesses by 2027. With a track record of supporting female-led businesses and a commitment to fostering a more inclusive entrepreneurial landscape, Tide is poised to play a pivotal role in empowering women to realize their full potential as business leaders.