Issue in Brief 

Prepared by the National Women’s Business Council November 2008 

Trends in SBA-Backed Financing 

to Women-Owned Businesses 

FY2004 to FY2008 

One essential element in the U.S. Small Business Administration’s (SBA) Congressionally-mandated mission to assist the Nation’s 27 million 

small businesses is to help meet their capital needs. SBA-backed financing helps provide loans to customers who might not qualify for business loans 

through normal lending channels. There are four primary types of SBA lending and equity investment programs available to borrowers: the 7(a) Loan 

Guaranty Program, the 504 Certified Development Company (CDC) Loan Program, the 7(m) MicroLoan Program, and the Small Business 

Investment Company (SBIC) Program.1 

As the number, employment and revenues of women-owned businesses have increased, so has the need for financing – both to start new businesses 

and to fuel the growth of existing businesses. This Issue in Brief examines the most current information on the SBA’s loan and financing programs, 

focusing on lending to women-owned firms and drawing upon newly-available information on FY2008 results as well as data for the previous four 

years. Numbers of loans, dollars lent, and average loan value to women business owners are examined on both an absolute and growth basis, with 

18.0 

21.1 

24.0 

21.8 22.2 22.6 

14.1 15.2 15.1 15.5 15.4 

FY2008, there was a 

owned businesses by investments. 22.0 Percent Share 

the SBA increased by 20.0 • Between FY2004 and 

9.3% between 2004 and 

2008, compared to a 16.0 16.6% increase in the 

14.0 0.1% decrease among 12.0 average value of loans 

all businesses. 10.0 made to women-owned 

•	 Over the same period, FY2004 FY2005 FY2006 FY2007 FY2008 businesses, compared

the number of loans with a 14.2% increase in 

Number of Loans Value of Loans the average value of 

decreased by 6.2% 

and equity investments 

loans made to all 

409 3rd Street, SW, Suite 210  Washington, DC 20024  202-205-3850 (p)  202-205-6825 (f)  www.nwbc.gov 

comparisons made to all firms over the same timeframe. 

The State of SBA-Backed Financing to WomenOwned Businesses 

•	 In FY2008, the SBA made 19,042 loans and equity 

investments to women-owned businesses, totaling $3.1 

billion. 

•	 The share of dollars lent to women-owned businesses 

increased from 14.1% in FY2004 to 15.4% in FY2008 

and the share of the number of loans and equity 

investments increased from 21.1% to 22.6% over the 

same period. 

•	 Between FY2004 and FY2008, the value of loans and 

investments to womenowned businesses 

increased at faster rates 

than assistance to 

businesses overall. 

Dollars lent to and 

invested in womenShare of Number and Value of SBA-Backed Loans owned businesses was 

to Women-Owned Businesses, FY2004-FY2008	 $165,073, compared to 

the average value of 

$242,090 for all SBA- 26.0 backed loans and equity 24.0 

among women-owned firms compared to a 12.5% 

decrease among all businesses. 

•	 However, both the value and total number of loans are 

down significantly from just a year before. Between 

FY2007 and FY2008, the value of loans and 

investments to women-owned firms decreased by 

13.0% and dollars lent to all businesses decreased by 

12.3%. During the same period, the number of loans 

to women-owned businesses and all businesses 

decreased by 26.1% and 27.4%, respectively. 

•	 In FY2008, the average value of SBA-backed loans 

and equity investments 

provided to women-
 

 

 

Trends in SBA-Backed Financing to Women-Owned Businesses, pg. 2 

businesses. which is 76% of the 

• The 7(a) Loan Guaranty Number and Value of SBA-Backed Loans average value of $182,492 

Program is the largest of to Women-Owned Businesses by Type, FY2008 for all 7(a) loan guaranties. 

the SBA-backed loan and 

Number of Loans equity programs, in terms 

of both the number of SBIC 

7(m) 0.4% loans and the total amount 6.7% 

504 

7.9% lent. In FY2008, the 7(a) 

program accounted for 

fully 71.6% of all SBA 7(a) dollars lent to women- 85.0% 

owned firms. The 504 

program accounted for 7(a) 504 7(m) SBIC 26.9%, SBIC for 1.0%, and 

the 7(m) program 

accounted for 0.4%. In 

FY2004, the programs accounted for 75.8%, 21.5%, 

2.5%, and 0.5% of dollars, respectively. 

•	 In FY2008, 85.0% of SBA’s loans and investments to 

women-owned businesses were provided through the 

7(a) program. The 504 program provided 7.9% of 

loans and investments, SBIC provided 0.4%, and the 

7(m) program accounted for 6.7%. In FY2004, the 

programs accounted for 87.1%, 6.9%, 0.7%, and 5.4% 

of loans and investments, respectively. 

7(a) Loan Guaranty Program2 

•	 In FY2008, the 7(a) program made 16,178 loan 

guaranties to women-owned businesses, totaling $2.3 

billion. This accounted for 17.8% of all dollars lent 

under the program and 23.3% of the number of loans 

guaranteed. 

•	 Both the total dollar value and number of loan 

guaranties from the 7(a) program were stronger among 

women-owned firms than among all firms between 

FY2004 and FY2008. While dollars to women-owned 

businesses increased by 3.3%, dollars overall shrunk by 

6.6%. In the same period, the number of loan 

guaranties decreased both to women-owned firms 

(8.5%) and among all firms 

(14.4%). 

•	 Declines were even greater 

between FY2007 and 

FY2008. The value of 7(a) 

loans to women-owned 

businesses declined by 

13.8% and to all firms by 

11.3%. The number of 

loans to women decreased 

29.1% and to all firms by 

30.3%. 

•	 In FY2008, the average 

value of 7(a) loan guaranties 

provided to women-owned 

businesses was $139,185, 

Trend in Dollar Value of SBA-Backed Loans 

FY2004 - FY2008 

2.9 3.5 3.5 3.6 3.1 

20.4 

23.2 23.2 23.3 

20.4 

0.0 

5.0 

10.0 

15.0 

20.0 

25.0 

FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 

Dollars (Billions) 

Women-Owned Firms All Firms 

•	 Between FY2004 and 

Value of Loans FY2008, there was a 12.9% 

7(m) increase in 7(a) average 0.4% SBIC	 

1.0% value among women- 504 

26.9% owned businesses, 

compared with a 9.1% 

increase in average value 

7(a) among all businesses. 71.7% 

504/Certified Development 7(a) 504 7(m) SBIC Company (CDC) Loan 

Program3 

• In FY2008, the 504 

program made 1,511 loan guaranties to women-owned 

businesses, totaling $847 million. This accounted for 

16.0% of all dollars lent under the program and 17.0% 

of the number of loans guaranteed. 

•	 Growth in the dollar value of loan guaranties and 

number of loan guarantees from the 504 program was 

slightly stronger among women-owned firms than 

among all firms between FY2004 and FY2008. While 

dollars to women-owned businesses grew by 36.9%, 

dollars overall grew by 32.2%. Growth rates for the 

number of loan guaranties were also higher for 

women-owned firms than all firms over this period 

(7.8% vs. 6.3%). 

•	 However, both the value and total number of CDC 

loans decreased significantly between FY2007 and 

FY2008. Loans and investments to women-owned 

firms decreased by 11.7% and dollars lent to all 

businesses decreased by 16.2%. During the same 

period, the number of loans to women-owned 

businesses and all businesses decreased by 14.1% and 

16/7%, respectively. 

•	 In FY2008, the average value of 504 loan guaranties 

provided to women-owned businesses was $560,268, 

which is 94% of the 

average value of $595,496 

for all 504 loan guaranties. 

•	 Between FY2004 and 

FY2008, the increase in 

the average value of a 504 

guaranty among womenowned businesses (27.0%) 

was greater than the 

increase in average value 

among all businesses 

(24.4%). 

7(m) MicroLoan Program4 

•	 In FY2008, the 7(m) 

program made 1,269 loans 
 

 

 

Trends in SBA-Backed Financing to Women-Owned Businesses, pg. 3 

to women-owned 

businesses, totaling $13.3 

million. This accounted for 

43.4% of all dollars lent 

under the program and 

47.8% of the number of 

loans made. 

•	 The dollar value of loans 

from the 7(m) program 

declined among both 

women-owned and all 

firms between FY2004 and 

FY2008. Dollars to 

women-owned businesses 

declined by 1.0%, and 

dollars overall declined by 

7.2%. The number of 7(m) loans to women-owned 

businesses grew by 16.3% over this period, compared 

to 9.1% among all firms. 

•	 In FY2008, the average value of 7(m) loans provided 

to women-owned businesses was $10,485, which is 

91% of the average value of $11,559 for all 7(m) loans. 

•	 Between FY2004 and FY2008, the average value of 

7(m) loans among women-owned businesses and 

among all businesses both decreased by 14.9%. 

SBIC Program5 

•	 In FY2008, the SBIC program made 84 investments to 

women-owned businesses, totaling $31.7 million. This 

Trend in Number of SBA-Backed Loans 

FY2004 – FY2008 

20.3 26.8 24.7 25.8 19 

96.4 

111.6 113.5 116.2 

84.3 

0.0 

20.0 

40.0 

60.0 

80.0 

100.0 

120.0 

140.0 

FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 

Number (Thousands) 

Women-Owned Firms All Firms 

accounted for 1.3% of all 

dollars invested under the 

program and 2.5% of the 

total investments made. 

•	 The dollar value and 

number of investments 

from the SBIC program 

among women-owned 

firms declined at higher 

rates than among all firms 

between FY2004 and 

FY2008. The dollar value 

for women-owned firms 

declined by 50.3%, 

compared to 14.4% among 

all firms. At the same time, 

the number of SBIC investments to women-owned 

businesses declined by 36.4%, compared to a 24.4% 

decline among all firms. 

•	 In FY2008, the average value of SBIC investments to 

women-owned businesses was $377,381, which is just 

52% of the average value of $719,751 for all SBIC 

investments. 

•	 Between FY2004 and FY2008, there was a 21.9% 

decrease in the average value of SBIC investments 

among women-owned businesses, compared with a 

13.2% increase in average value among all businesses. 

SBA-Backed Loans and Financing to Women-Owned and All Firms: FY2008 

Number Dollars ($000s) 

WomenOwned 

Businesses 

All 

Businesses 

Share to 

Women-Owned 

Businesses 

WomenOwned 

Businesses 

All 

Businesses 

Share to 

Women-Owned 

Businesses 

Total 

2008 

2004 

19,042 

20,307 

84,343 

96,385 

22.6 

21.1 

$3,143,313 

$2,875,770 

$20,418,602 

$20,441,091 

15.4

14.1 

7(a) 

2008 

2004 

16,178 

17,682 

69,434 

81,133 

23.3 

21.8 

$2,251,742 

$2,180,246 

$12,671,136 

$13,571,560 

17.8

16.1 

504 

2008 

2004 

1,511 

1,402 

8,883 

8,357 

17.0 

16.8 

$846,565 

$618,279 

$5,289,790 

$4,000,473 

16.0

15.5 

MicroLoan 

2008 

2004 

1,269 

1,091 

2,654 

2,433 

47.8 

44.8 

$13,306 

$13,445 

$30,676 

$33,058 

43.4

40.7 

SBIC 

2008 

2004 

84 

132 

3,372 

4,462 

2.5 

3.0 

$31,700 

$63,800 

$2,427,000 

$2,836,000 

1.3

2.2 

Source: All data from SBA loan and financing program offices. 
 

Trends in SBA-Backed Financing to Women-Owned Businesses, pg. 4 

Conclusions and Recommendations 

•	 While the total value of SBA-backed financing to 

women-owned businesses has increased over the past 

five years, the Council is troubled that the overall 

number of loans has declined so sharply, particularly 

between FY2007 and FY2008. 

•	 In addition, while the total dollars going to womenowned firms is increasing at a faster rate than among 

all firms, the average value of loans made to womenowned businesses is still less than the average value of 

loans made to all firms in all four loan categories. 

•	 The share of dollars coming from the 7(a), 504, and 

7(m) programs has remained stable over the past five 

years. More can be done, however, to increase the 

share of SBIC investment in women-owned firms, 

which declined from an already low 2.2% in FY2004 

to 1.0% in FY2008. 

•	 We recommend that the SBA increase its outreach 

efforts to the women’s business community, and to 

the financial community, to encourage more 

participation by women business owners in these 

valuable programs. Given the fact that women-owned 

firms are just as financially strong and creditworthy as 

the average U.S. firm, showing no significant 

differences in terms of bill payment, financial stress, 

and overall creditworthiness,6 more women business 

owners should be participating in SBA’s lending 

programs. The SBA should more strongly encourage 

SBA-guaranteed lenders in this regard. 

•	 Given the pressures of the current economic climate, 

the Council also recommends that the SBA increase its 

loan-making efforts across the board. The declines in 

the number and value of loans between FY2007 and 

FY2008 are troubling. 
 

 

Trends in SBA-Backed Financing to Women-Owned Businesses, pg. 5 

SBA Lending and Financing Programs7 

The 7(a) Loan Guaranty Program: This is the SBA’s 

primary business loan program. It is also the most flexible, 

since the agency can guarantee financing for a variety of 

general business purposes. 7(a) loans are provided by 

lenders who choose to structure their own loans under the 

SBA’s requirements, and who apply for and receive a 

guaranty from the SBA on a portion of these loans. Under 

the 7(a) program, the SBA guarantees up to $1.5 million8 

of a private-sector loan. – as much as 85% on loans of 

$150,000 or less and up to 75% on loans greater than 

$150,000. 

A key concept of the 7(a) Loan Guaranty Program is that 

the loan comes from a commercial lender, and the 

guaranty comes from the SBA. A business applies to the 

lender, and the lender decides whether to make or reject 

the loan internally, or if the application needs to be 

bolstered with an SBA guaranty. 

504 Certified Development Company Program: The 

CDC/504 loan program is a long-term financing tool for 

economic development within a community. The 504 

Program provides growing businesses with long-term, 

fixed-rate financing for major fixed assets, such as land and 

buildings. A Certified Development Company is a 

nonprofit corporation set up to contribute to the economic 

development of its community. CDCs work with the SBA 

and private-sector lenders to provide financing to small 

businesses. There are about 270 CDCs nationwide. Each 

CDC covers a specific geographic area. 

Typically, a 504 project includes a loan secured with a 

senior lien from a private-sector lender covering up to 50 

percent of the project cost, a loan secured with a junior 

lien from the CDC (backed by a 100 percent SBAguaranteed debenture) covering up to 40 percent of the 

cost, and a contribution of at least 10 percent equity from 

the small business being helped. 

The maximum SBA debenture is $1 million for meeting 

the job creation criteria or a community development goal. 

Generally, a business must create or retain one job for 

every $50,000 provided by the SBA. The maximum SBA 

debenture is $1.3 million for meeting a public policy goal. 

Expansion of small business concerns owned and 

controlled by women is included among listed public 

policy goals. 

The 7(m) MicroLoan Program: This program provides 

loans to start-up, newly established, or growing small 

business concerns. Under this program, SBA makes funds 

available to nonprofit community based lenders 

(intermediaries) which, in turn, make loans to eligible 

borrowers in amounts up to a maximum of $35,000. 

Applications are submitted to the local intermediary and all 

credit decisions are made on the local level. 

Small Business Investment Company (SBIC) Program: The 

SBIC Program helps to fulfill a small business’ need for 

larger amounts of capital – whether for start-up or growth. 

SBIC financing typically fills the gap between debt capital 

and venture capital. Licensed and regulated by the SBA, 

SBICs are privately owned and managed investment 

companies that make capital available to small businesses 

either through equity investments or loans. They use their 

own funds plus funds obtained at favorable rates with SBA 

guaranties. SBICs are for-profit companies whose 

incentive is to share in the success of small businesses. In 

addition to equity capital and long-term loans, SBICs 

provide debt-equity investments and management 

assistance. 

All SBA loan and investment programs are managed at the 

district level. For further information, please contact your 

local SBA office. You can find your local office at 

http://www.sba.gov/ 

The National Women’s Business Council is a bi-partisan 

Federal government body created to serve as an 

independent source of advice and policy recommendations 

to the President, Congress, and the U.S. Small Business 

Administration on economic issues of importance to 

women business owners. Members of the Council are 

prominent women business owners and leaders of 

women’s business organizations. For more information 

about the Council, its mission and activities, contact: 

National Women’s Business Council, 409 3rd Street, SW, 

Suite 210, Washington, DC 20024; phone: 202-205-3850; 

fax: 202-205-6825; e-mail: nwbc@sba.gov, web site: 

http://www.nwbc.gov. 

1 U.S. Small Business Administration, “Lender’s & Equity 

Investor’s Guide”, 2nd Edition. http://www.sba.gov. 2 http://www.sba.gov/financing/sbaloan/7a.html 

3 http://www.sba.gov/financing/sbaloan/cdc504.html 4 http://www.sba.gov/financing/sbaloan/microloans.html 

5 http://www.sba.gov/INV/ 6 Center for Women’s Business Research, “Removing the 

Boundaries: The Continued Progress and Achievement of 

Women-Owned Enterprises,” November 2001. 

http://www.womensbusinessresearch.org/Research/11-13-

2001/11-13-2001.htm. 7 U.S. Small Business Administration, “Lender’s & Equity 

Investor’s Guide”, 2nd Edition. http://www.sba.gov. 8 H.R. 4062 was signed into law on April 5, 2004. As a result of 

this legislation, the 7(a) loan guaranty limit was raised from $1 

million to $1.5 million.