It’s 2025, and women entrepreneurs are driving one of the most significant shifts in the UK business landscape. Women now lead almost 20% of all SMEs and represent nearly 30% of high-growth firms, according to recent data from The Gender Index and 365 Finance.
Yet despite that progress, there’s still a stark divide in access to funding from high-street banks.
Across traditional banks, women-led firms account for only around 14% of total debt finance secured, less than half their representation in the SME market.
But there’s one part of the finance world where women are being supported and succeeding: alternative finance.
From fintech platforms to community development lenders, women-led businesses are outperforming men in loan approval rates and receiving a greater share of total funding than ever before.
This is more than a funding statistic, it’s a sign of how the SME finance ecosystem is changing in favour of women-led businesses.
Yet Again Traditional Channels Miss the Mark
Mainstream banks still process the highest volume of SME applications, but that’s not because they’re better lenders. It’s because they’ve had a historic monopoly on data and visibility, not because they’ve delivered better outcomes.
For many women entrepreneurs, those outcomes have been disappointing for decades. Traditional banks have often applied rigid criteria, overlooked potential, and misunderstood the realities of running small, modern, service-based businesses.
That history has created a psychological barrier.
Many women-led businesses hesitate to apply for finance not because they don’t need it, but because they’ve been let down, declined, or discouraged too many times before.
Add to that the persistence of outdated credit models and it’s easy to see why trust has eroded.
The result is a cycle of underrepresentation born from experience, not preference.
It’s not that women are less interested in finance, it’s that the mainstream system hasn’t given them a reason to believe it will work for them. Times have changed though, and women-led businesses are receiving approximately 2.45 times more support than male-led businesses in the alternative finance sector, relative to their share of the SME market.
Alternative Finance: The Quiet Revolution Empowering Women
While the big banks debate diversity targets, the alternative finance sector is quietly leading the change.
Across community lenders, fintech platforms, and non-bank finance providers, the numbers tell a different story:
38% of all business loans from Community Development Financial Institutions (CDFIs) in 2024 went to women-led businesses.
44% of loans under £100,000 in the same period went to women-led firms.
(British Business Bank, Investing in Women Code Annual Report 2025)
Given that women-led businesses represent around 20% of UK SMEs, that level of lending means female-owned firms are being supported at 2.45 times the rate of their male counterparts within the alternative finance space.
That’s not just closing the gap, it’s reversing decades of underrepresentation.
And this isn’t a coincidence. Fintechs, specialist lenders and brokers like Finspire Finance are structured to assess businesses differently:
They focus on cashflow and future potential, not just trading history.
They offer relationship-based underwriting, with genuine human engagement and tailored structuring.
They integrate open banking and real-time data, giving a fairer, more dynamic picture of performance and risk.
As a result, more women entrepreneurs are getting the “yes” they deserve, quickly, transparently, and on terms that recognise their true potential rather than outdated assumptions and anecdotal underwriting methodologies that are still prevalent in high-street banking.
Why Women Aren’t Borrowing Bigger, and Why It’s Not About Gender
It’s often said that women “ask for smaller loans.”
While true in statistical terms, the reason isn’t gender, it’s guidance.
According to the British Business Bank’s 2025 SME Finance Survey, nearly two in three businesses believe they know where to go for funding, yet only one in three of these businesses actually approach the right lenders or products.
This mismatch leads to smaller applications, misaligned products, and missed opportunities for growth.
Women, just like men, are navigating a fragmented and confusing finance landscape, where thousands of options exist but few business owners know how to find the right one.
It’s not about caution or confidence, it’s about connection.
This is where Finspire Finance steps in. Our role is to bridge that knowledge gap, matching business owners with the right lenders, the right products, and the right terms, whether they’re seeking growth capital, working capital, or project finance.
When the facility fits the business, the outcomes, and the ambition, are naturally bigger.
Why Alternative Lenders Succeed Where Banks Fail
The shift isn’t just about gender, it’s about innovation in how creditworthiness is judged.
Here’s how alternative lenders are creating a more level playing field:
| Traditional (older) Institutions | Alternative (newer) Lenders |
|---|---|
|
Rely heavily on historical financials, existing banking relationship, and collateral |
Assess real-time cashflow and future receivables for data-driven assessments |
|
Slow processes where “the human touch” often leads to biases and potential discrimination |
Fast, digital-first approvals |
|
Credit scoring models that blend historic trading performances and human opinion |
Flexible, sector-specific underwriting that typically scores real-time financial health |
|
Rigid lending products |
Custom solutions |
|
Limited engagement with newer or smaller firms |
Proactive support for growing and underrepresented SMEs |
This innovation is especially empowering for women entrepreneurs, who statistically are more likely to operate in service-based sectors, start leaner, and reinvest profits rather than seek funding early.
By adapting to modern business realities, fintech and alternative finance are funding the next wave of female-led growth.
The Ripple Effect: What Happens When Women Get Funded
It’s not just an equality issue, it’s an economic one.
Studies by the OECD and McKinsey show that closing the gender gap in entrepreneurship could add up to £250 billion to the UK economy.
When women gain equal access to finance:
They grow businesses that are more sustainable and community-oriented.
They create more jobs, especially in local economies.
And they reinvest more into innovation, workforce wellbeing, and growth.
Alternative lenders are effectively unlocking a hidden growth engine, by backing entrepreneurs that mainstream finance still overlooks.
Equal Access, Smarter Finance
At Finspire Finance, we’ve seen firsthand how flexible funding structures can transform the growth path of all businesses.
Whether it’s a digital marketing agency scaling contracts, a manufacturing firm improving cashflow between supplier payments, or a consultancy funding tax liabilities while expanding headcount, the common thread is access.
We focus on:
Personalised funding: not one-size-fits-all lending.
Data-driven underwriting: we favour lenders using cashflow analytics rather than anecdotal biases.
Support for diverse leadership: because opportunity shouldn’t depend on demographics.
By connecting your business with the right facility, from revolving credit and invoice finance to specialist VAT and tax loans, we help all entrepreneurs secure the same financial runway that is long overdue.
The Future Is (Finally) Fairer
The message from the data is clear: Traditional banks may still hold the market share, but alternative lenders now hold the moral advantage, and increasingly, the competitive one too.
Women-led businesses are no longer waiting for banks to change. They’re finding partners who already have.
And as fintech and non-bank lenders continue to grow, it’s likely we’ll see the gender gap in business finance close faster in the next five years than it has in the past twenty.
