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Does the SBA aid women enough?

At a Senate hearing, slow funding for centers that support female entrepreneurs becomes the focus.

By Renuka Rayasam, FSB contributor

FSB -- Women's business advocates criticized the Small Business Administration for failing to properly support a national program for female entrepreneurs at a Senate hearing Thursday morning.

Critics complained that the SBA was consistently late in paying out grants to Women's Business Centers, slowing their work. Only about 30 percent of this funding arrived on time, according to an audit by the Government Accountability Office.

The centers are important in helping to foster the growth of women-owned firms, which still lag behind men's companies in revenue and the number of employees, said Senate Small Business Committee Chair John Kerry. Women own about 16 percent of firms with employees, according to statistics cited by Kerry; only 3% of women-owned firms have revenues greater than $1 million, half the percentage for men, he said.

The SBA has been working on improving the centers, but not fast enough for critics. Since March the agency has made an effort to run them more efficiently, through efforts such as centralizing control of the centers, said Anoop Prakash, an associate administrator at the agency.

The hearing comes a week after the SBA released a study showing differences in men and women's motivations for starting companies and styles of managing them. Male entrepreneurs are more likely to start a business to make money, had higher expectations about the success of their ventures, did more research and were likelier to start technology based companies, according to the data. The study polled the owners of 685 new businesses started between 1998 and 1999.

Such data should be used to guide the SBA in tailoring the centers to the needs of women entrepreneurs, said leaders of groups of women entrepreneurs. "By highlighting those differences we should all realize that we may not be able to treat all small businesses the same," says Erin Fuller, executive director of the National Association of Women Business Owners.  Top of page

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