In a utopian paradise, women would be able to do anything men can do, but in reality, there tend to be more and larger barriers to women’s achievement. Female job candidates tend to be scrutinized more intensely than male peers; female employees are less likely to receive responsibilities and opportunities, raises and promotions. So, many ambitious female professionals turn to entrepreneurship, hoping that they can create for themselves a work environment that allows them to achieve the success they crave.

Unfortunately, though it might seem that female business owners have the opportunity to control every aspect of business growth, the truth is that entrepreneurs do not operate in a vacuum. Business owners may have total control over decisions within their organization, but external systems upon which female entrepreneurs rely remain entrenched in gender bias that can interfere with their business goals and dreams.

An exceptional example of this is related to the financial services entrepreneurs require. Loan approval rates for female business owners are notoriously lower than that of their male peers; proportionally, only half of women entrepreneurs receive SBA loans compared to male entrepreneurs, and men in business are likely to take out SBA loan amounts 2.5 times higher than women.

But, is gender bias fully to blame for women business leaders’ difficulty accessing financing, or are there other issues at play? Read on to find out.

Women Tend to Own Businesses in the Retail Sector

There are female entrepreneurs working in every industry, from healthcare to waste management to construction, but one of the most popular industries for women business owners is retail. Retail trade involves selling merchandise, usually to consumers but sometimes to business clients. Bookstores are within the retail sector, as are convenience stores, grocery stores, ecommerce stores, mall kiosks and more. According to the Motley Fool, as much as 9 percent of all women-owned businesses fall into this category.

Yet, retail is risky. Retail businesses, especially young ones, tend to have higher expenses and lower revenues than businesses in other industries. Because lenders need to know that they will see a return on their loan, they are less likely to extend loans to retail businesses. Due to their choice of industry, these women will find it more difficult to secure funding.

Women Entrepreneurs Seek Funding With Younger Businesses

Lenders typically want to know as much as possible about a business before they extend financing, and more established businesses have more information to offer. Businesses that have been operating for more than two years can demonstrate many months of revenues and expenses, from which lenders can get a better sense of their success and their risk. Using this data, lenders can calculate exactly how much debt a business is likely to be able to handle, which makes them more likely to offer a useful loan.

However, it is much more difficult to reach two or more years of operation without the funding a business needs to survive in its earliest stages. Often, women with younger businesses will apply for a loan, be denied due to the age of their organization, and then succumb to business failure. Thus, female entrepreneurs can become trapped in a cycle of starting new businesses and being unable to secure the financing they need.

Women Generally Have Lower Credit Scores

Lenders assess not only a business’s credit score but the personal credit score of its owner and leader, as well, to determine whether a business can be trustworthy with debt. Some lenders are pickier than others when it comes to the quality of credit score they will accept; banks want to see a perfect credit history, whereas online lenders might be willing to accept a slightly lower score (in exchange for higher fees, of course).

Unfortunately, women tend to have lower credit scores than men. This is likely due to the fact that women earn lower salaries than men, increasing their reliance on credit cards for essential bills. When credit utilization is higher, credit scores decrease, making it more difficult for a female business owner to acquire financing.

Gender Discrimination Remains a Serious Issue

Many lenders supply the reasons listed above as justification for accepting women’s business loan applications at a lower rate, but the truth is that gender bias likely remains a factor in preventing many female entrepreneurs from accessing the funding they need. Frustratingly, there is little that female business owners can do to fight this kind of discrimination — except continue to operate a thriving business that contributes to the changing narrative around female professional capability.

Female entrepreneurs who do need access to financing might conduct deep research to find lenders who are known to be friendly to women-owned businesses. Women should also know more about what type of loan they need and demand loan amounts and terms that suit their business projections. There is a big difference between business bridge loans and business lines of credit, and applying for the right financial product will help women achieve success.

We don’t live in a utopian paradise, and gender bias continues to make it difficult for women to achieve professional success in almost every way. Still, with hard work, perseverance and diligent research, female entrepreneurs can acquire the funding they need to build a business.