Frontiers of Entrepreneurship Research
1997 Edition


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Deborah Cain Good

Seton Hill College
Greensburg, PA  15601

Telephone: 412-830-4625
Fax: 412-834-7131

Principal Topics

Though considerable resources have been expended over the past several years examining the topic of small business' accessibility to credit, the issue continues to be recognized as one of the greatest obstacles to be faced by the small business owner (SBA, 1995).  Current research also suggest that this problem may be exacerbated for women.  A number of financing programs have been established to address the issue of credit accessibility thereby promoting small business formation and growth.  Often special attention in these programs has been focused on assisting the woman business owner.

This study is designed to assess the degree to which one of the best known of such financing programs, the U.S. Small Business Administration's (SBA) 7(a) Loan Guaranty Program, meets that goal.  Gender-based comparisons of the 7(a) loan package terms were completed by firm size, industry sector and geographic locale.


Data on various terms of the loans made to small business owners under the terms of the SBA 7(A) Loan Guaranty Program were secured with the cooperation of the Pittsburgh, Pennsylvania and Columbia, South Carolina District Offices of the Small Business Administration for the period January, 1993 through December, 1995.  The database for this study covers 2,615 loans made by the two offices for the stated time period.

Major Findings

Gender effects are evident in the 7(a) loan data for this sample.  Specifically, women received an average of $65,000 less in 7(a) loan dollars, paid an interest rate .7% higher, and had ten fewer months in which to repay their loans than their male counterparts.  Controlling for geographic location, firm size and industry shows persistent statistically significant gender-based differences in various loan terms.


This study addresses gender-based and regional differences in business financing from a unique perspective.  Rather than assessing perceptual data using controlled experimentation or self-report questionnaire measures, this project examines the objective, financial-based data collected by the Small Business Administration as a result of loans disbursed to small business owners under the 7(a) Loan Program.  This data is then assessed for any gender-related or regional patterns that might signal financing obstacles for women business owners.

This study's findings provide empirical data for public policy makers, women's groups and financing institutions as to the gender and regional comparability of financing conditions in a popular small business loan program.  The study results serve as a report card on recent efforts to make credit more accessible to all small business owners.

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