Do Equally Owned Small Businesses Have Equal Access to Credit?

Previous research in small-business financing has generally ignored those businesses owned equally by males and females. The rationale has been that such businesses share the characteristics of both types of owners and would confound any gender-based differences. This paper presents an empirical study in which the credit access experiences of equally owned small businesses are compared to those of their female- and male-owned entrepreneurial counterparts. Various measures of credit constraints are introduced that suggest that equally owned businesses often do experience larger constraints than male-owned businesses and smaller constraints than female-owned businesses, when all credit applicants are considered. However, the results are more mixed in comparisons of successful applicants’ constraints. A different approach from that of existing research is then used to study exactly how equally owned small businesses’ experiences are unique, rather than merely whether they differ from those of their counterparts. The evidence indicates that different factors are determining the credit application outcomes of all three ownership groups. Where similar determinants are found, equally owned businesses are influenced in a manner more similar to male-owned small businesses. The results show that equally owned small businesses’ credit access experience is not equally balanced between those of their counterparts.