Profits for Women-Owned Businesses Decreased by 26% in 2021

Biz2Credit’s annual women-owned business study found that profits for women-owned businesses dropped 26% in 2021 from 2020, while average annual revenues dipped 4%. Additionally, the study found that operating expenses increased, which was the primary reason profits fell in 2021.

“The cost of doing business rose significantly in 2021, particularly labor costs, fuel costs and raw materials and inventory prices, which skyrocketed because of supply chain disruption,” Rohit Arora, CEO of Biz2Credit, said. “These economic pressures hurt women-owned firms especially hard. Supply chain shortages negatively impacted the earning potential of small businesses.

“Further, the emergence of the omicron variant at a time when the first wave of COVID began to wane and the persistence of restrictions hurt small businesses. This resulted in the reluctance of consumers to patronize restaurants, Broadway theaters and other entertainment venues and travel and tourism-related businesses.”

Women-owned business profits averaged $88,995, much less than 2020’s figure of $119,654 and $47,152 less than the average for men-owned firms ($136,147) in 2021. Biz2Credit’s analysis also revealed that the average credit score (580) for women who own businesses decreased from 588 last year and was 14 points lower than the average score of men who own businesses (594) in the study.

The Biz2Credit study reviewed 100,000 credit inquiries from across the country for the full prior year (2021) and examined the financial performance of women-owned small- to mid-sized companies in the United States. Despite austerity imposed by the COVID-19 pandemic, many women-owned businesses continue to find growth opportunities.

Performance of Women-Owned Businesses in 2021

  • Average annual revenues of women-owned businesses dropped from $493,401 in 2020 to $475,707 in 2021.
  • Average profits of women-owned businesses fell to $88,995 in 2021 from $119,654 in 2020
  • Average expenses of women-owned businesses increased from $373,748 in 2020 to $386,712 in 2021.
  • The average credit score for women who own businesses dropped from 588 in 2020 to 580 in 2021.
  • 9% of the women-owned companies in 2021 were in the services industry, making it the top industry among women-owned businesses.

“Although average annual revenue for women-owned businesses declined, one of the reasons is because women began starting new businesses at a higher rate during the pandemic. That’s the bright side,” Arora said. “The decline in the average age of business declined, which is an indication of younger businesses seeking funding on our platform in the past year.”

Comparing Women-Owned and Men-Owned Companies

Biz2Credit compared women-owned and men-owned businesses in its study, and the numbers underscore a larger problem: women-owned companies are experiencing a revenue gap. Some specifics include:

  • According to Biz2Credit data from 2021, 33% of business loan applications came from women-owned businesses, while 67% came from men-owned businesses.
  • Women-owned businesses ($475,707) earned $199,936 less on average than men-owned firms ($675,643) in 2021.
  • On average, the credit score for women who own businesses (580) was 14 points lower than for men who own businesses (594) in 2021.
  • The average loan size for women-owned businesses ($49,712) was 41% lower than the average loan size for businesses owned by men ($83,198) in 2020.
  • The average age of business for women-owned businesses was almost four years (45 months) and was lower than the average age of business for men-owned companies (48 months).

Industry and Geographic Distribution

Almost one-third (31.9%) of the women-owned companies that applied for business loans during the past 12 months have been in services (except public administration). Retail accounted for 15.1% of the applicants, followed by accommodation and food services (9.1%), healthcare and social assistance (7.4%), transportation and warehousing (5.4%) and arts, entertainment and recreation (4.7%).

Texas produced the most applications from women-owned companies, followed by Georgia, Illinois, Florida, California and New York.

Paycheck Protection Program (PPP) Round Two

In December 2020, Congress appropriated $284 billion for small business COVID-19 relief for a second round of the Paycheck Protection Program. Biz2Credit examined its data from PPP loan applicants and discovered that 49% of the applicants for round two of the PPP were women who owned businesses (compared with all SBA lenders at 34%). The average approved amount for applicants for round two of the PPP who identified as women on the Biz2Credit platform was $23,101 compared with $36,348 for those who identified as men.

Importance of Women-Owned Businesses

There were nearly 13 million women-owned businesses in the United States as of 2019, and according to American Express’s State of Women-Owned Businesses Report, there was a 43% increase in businesses owned by women of color from 2014 to 2019. An estimated 10 million people are employed by women-owned companies and these companies generate nearly $1.8 trillion in revenue, according to the Census Bureau.

Biz2Credit has partnered with the Association of Women’s Business Centers, which works to secure economic justice and entrepreneurial opportunities by supporting and sustaining a national network of 140 Women’s Business Centers (WBC). These centers help women succeed by providing training, mentoring, business development and financing opportunities to more than 150,000 women each year.

“Women’s Business Centers have grown tremendously in number of locations and clients served. As economic first responders to the pandemic, Women’s Business Centers assisted a record number of clients to access a record level of funding for their businesses compared to prior years,” Corinne Hodges, CEO of the Association of Women’s Business Centers, said. “The national network of 140 Women’s Business Centers provides free counseling, training, networking opportunities and, perhaps most importantly, access to much needed funding (or capital) for businesses to get started and/or grow.”

In 2021, Women’s Business Centers locations served 88,000 clients, helped start 3,300 firms and supported 89,697 jobs by offering more than 27,000 training sessions and nearly 170,000 counseling hours. Clients of Women’s Business Centers received a higher total in SBA loans ($262,455,406) in 2021 than 2020 (up 31%).

A Story of Success

In Biz2Credit’s study, women who own businesses expressed the importance of securing financing during the difficult economic circumstances of the COVID-19 pandemic, which continued to ravage many small businesses during 2021. Many entrepreneurs who were able to obtain funding said it provided a lifeline.

“The funds that I received allowed me to alleviate a lot of tension and pressure and enabled me to keep my staff,” Debbie Elder, who has owned Shady Oak Primary School in Richmond, TX, since 2014, said. “Once I received my money, that whole headache went away. I was then able focus on bringing in more students, marketing and making sure that this financial situation never happens to us again.”


The dataset for Biz2Credit’s women-owned business study was comprised of nearly 100,000 completed credit applications received via the Biz2Credit platform in 2021. The four most important variables in the analysis were annual revenue, operating expenses, age of business and personal credit score. The data was then tabulated to examine women-owned and men-owned firms based on annual revenue, operating expenses, age of business, personal credit score, funding rate and average loan size. The study looked at 20 different industries as well as geography.

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