Tackling bias in SME lending: How fintech is levelling the playing field for women-owned businesses

Diversity in business matters. We want the small businesses we support to reflect the diversity of the communities they serve. 

This International Women’s Day, we consider how bias in small business lending has negatively impacted women, and how technology is being used to improve outcomes for female business owners.

The issue facing women-led businesses

Given equal access to finance, it’s estimated that women entrepreneurs could achieve £250 billion in growth, if they were funded to the same level as men.¹

Historically, access to finance has proved more challenging for women-led businesses, with female founders and entrepreneurs being 31% less likely to secure early stage funding than their male counterparts.²

When they do secure funding, women are more likely to receive smaller loan offers – not necessarily because their businesses are a less safe bet, but because the system assesses risk through an uneven lens. On average women-led businesses receive £174k (versus an average loan amount of £507k for male-led businesses).³

As a result, female business owners may be more reliant on personal finances to fund their ambitions. When viable businesses are shut out of access to capital, the economy loses talent, ideas and growth.

How fintechs are using technology to level the playing field

Unlike traditional banks, fintechs – such as Funding Circle – use technology and machine learning to assess creditworthiness more efficiently and provide faster lending decisions.

At Funding Circle, gender is not part of our application process, and it doesn’t play a role in our credit models or eligibility assessment.

All our business lending decisions start with an online application – with no in-person interviews or business cases required – and every application is assessed based on a consistent credit risk model, meaning every business is judged objectively on its recent financial performance.

Initiatives such as the British Business Bank’s Investing in Women Code are also helping to ensure that women business owners have equal access to finance – and Funding Circle is proud to be a partner to the scheme.

At Funding Circle, we’ve always believed that small businesses are the ones driving meaningful change for communities and the UK economy, and we’re proud to back women-led businesses. 

If you’re looking for equal opportunity access to finance, check your eligibility in just 30 seconds.

02/03/26: While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice. 

¹ The Rose Review, via UK Parliament’s female entrepreneurship report

² Startups Magazine: Female entrepreneurs 31% less likely to get funding

³ British Business Bank: Small Business Finance Markets 2023/24