How a 1988 law changed the game for American businesswomen

• The Women's Business Ownership Act of 1988 allowed women to get a business loan without a male co-signer.
• Since 1972, the number of women-owned businesses has increased by 31 times.
• Local bank ESL Federal Credit Union is focused on forming relationships to build women up in business roles.

If a woman wanted to get a business bank loan 30 years ago, she couldn’t do it without the signature of a male relative. A witness in a federal legislation hearing at the time had her 17-year-old son cosign for a loan since she didn’t have a living husband, father or brother.

Businesswomen usually lacked the federal resources that businessmen enjoyed, and statistics on women in business were often inaccurate.

But in 1988, the passage of the Women's Business Ownership Act erased a number of barriers that kept women from fair representation in the business sphere. As the act hits its 30th anniversary, which falls during National Women's Small Business Month in October, the number of female entrepreneurs in the U.S. has exploded and become an integral part of the U.S. economic fabric.

More:Rhonda Abrams: Women business owners will save America

The number of women-owned businesses increased by 31 times in the last four decades, rising from 402,000 businesses in 1972 to 12.3 million businesses, or 40 percent of all firms, in 2018, according to an American Express report on the state of women-owned businesses. Revenue from women-owned enterprises stood at $1.8 trillion this year.  

Making the connection

While women may still struggle to be acknowledged as equals in business around the country, especially when it comes to procuring a bank loan, local firms are prioritizing support for new women-owned businesses looking to take off.

“What I’ve learned that it’s kind of difficult for women to first own a business, and then to get financing,” said Rochelle Fields, a relationship manager in business banking for ESL Federal Credit Union. She works with business owners to establish lines of credit and other financial supports and takes special care to connect with who she calls the “underserved” — women- and minority-owned businesses. 

The banking world can be an intimidating place, especially for business owners who’ve never applied for bank loans before, or who see banks as simply transactional, said Fields. From the banking side, there is now a concerted effort to create a banking relationship that isn’t strictly about the numbers. 

“Sometimes the ‘hard sale’ doesn’t necessarily work for women, and there’s a lot of focus around that,” said Fields. “Maybe it’s having a different type of conversation — it’s not about just discussing the numbers of a business.” 

Over the last three years, Fields formed a banking relationship with Judy Miller, CEO of Miller & Associates, an IT services firm based in Brighton.

Miller started her company as the Great Recession was taking the wind out of the U.S. economy. "It was a very difficult time financially to look at who would loan us money to start a company,” she said. “But being locall owned and private, we knew that we wanted to team with a bank that was just like us. It was a no-brainer.” 

She first dealt with a local ESL branch for a home equity line of credit, and then connected with the bank’s business credit and 401K services later as her firm grew. She and Fields have been working together on the firm’s financials since 2015. 

“We started with just an idea, but kept that relationship going as our business grew and our needs grew, and ESL was right there with us,” said Miller. “We were always in communication.”

Jenni Tuller, owner of Physical Therapy Services of Rochester, said she knew nothing about banking or accounting when she took over the private practice from the former owner two years ago. 

“I was starting from scratch learning the business side,” she said. After evaluating loan proposals from four or five local banks, she settled on ESL, which was her personal bank and “bent over backwards” to help reach an agreement that worked for her business, she said. 

“I was looking at taking out a loan that I never in my wildest dreams could have imagined,” she said. “It was terrifying. But the whole (ESL) team did well by me. I went from feeling like a little girl to really being able to know what I’m talking about.”

Women supporting women

Fields and Miller are heavily involved in connecting with other businesswomen across the region, whether through mentorship or organizations like the Rochester Women’s Network. 

For Miller, who is part of a small crew of women working in information technology, it is vitally important to share ideas and feedback with other women working in tech and running their own businesses. 

The physical therapy world can be isolating for women in practice ownership, said Tuller — most owners are men, and she's gotten mistaken for the office manager more than once. 

To other women looking for success in the field, she would say this — “Be ready to fight for it. Be willing to share your story, because I went from male banker to male banker, asking for money. You’ve got to be able to be confident and willing to put yourself out there.”  

As a small company, Miller & Associates has the opportunity to be flexible with its work schedules and contracts for its female employees, who may need to work around child care or other constraints, said Miller.

“The unique challenges that face women are not a disadvantage — it’s just about the workforce learning to embrace it,” she said.

The battle isn’t over

Though the Women's Business Ownership Act changed the game for American businesswomen, there are always further barriers to overcome. And the time is now, given today’s heightened focus on #MeToo and women’s equality, said Fields. 

The challenge for banks is to attract and recruit more women into financial positions, she said. If female business owners feel supported by relationships with other women in the financial sector, hopefully, more will come forward for funding. 

“I think the focus on how you really connect with a women-owned business is going to be talked about more greatly,” she said. “You can feel comfortable to know that someone that looks like you … can really assist you and help you grow.” 

About 93 percent of all women-owned businesses haven’t reached $250,000 in revenue, which is seen as a benchmark for when growth and employment really takes off, as reported by the Women’s Business Enterprise National Council. That shows business owners could be doing more to lift up their local women-owned business community by sharing knowledge and talents, said Miller. 

“It’s knowing how to do your business plan, or how to reach that goal in three years,” she said. “Who do I know who can give me the knowledge and ideas? That’s the recipe right there.”