Unlocking Potential: Financing Women- and Women-of-Color-Owned Businesses in Utah

To continue the efforts of Project DEEP, aimed at disrupting the entrepreneurial ecosystem by supporting diverse entrepreneurs, the JPMorgan Chase Foundation provided additional grant funding to the Sorenson Impact Institute. The second phase of Project DEEP seeks to understand the capital needs, financing landscape and barriers to accessing capital for women and women of color entrepreneurs in Utah.

In 2023, Utah was ranked one of the top ten states for business for its skilled workforce, robust economy, and business-friendly environment. Despite this overall positive ranking, a study by Clarify Capital revealed that Utah ranks among the worst states for women-owned businesses.

This evaluation accounts for factors such as:

  • The percentage of women-owned small businesses
  • Gender pay gaps
  • Female unemployment rates
  • The presence of women-owned businesses generating $1 million or more in annual revenue
  • The density of women-owned companies per 10,000 residents in each state

Building upon the growing body of national research addressing the challenges faced by underserved entrepreneurs, Sorenson Impact Institute produced a thorough report examining the role of financial institutions in Utah that provide financing to women and women of color entrepreneurs, focusing on two key dimensions:

  1. The characteristics of women- and women-of-color-owned businesses in Utah
  2. The financing landscape in Utah for small businesses operating in underserved communities

This report is based on secondary research and analysis of data obtained from the U.S. Census Bureau Annual Business Survey and from primary interviews with financial institutions that target underserved entrepreneurs in Utah. The primary objective of these interviews was to gain insights into how these financial institutions have effectively offered products and services to underserved entrepreneurs who have historically and contemporarily faced barriers to accessing capital from traditional lending institutions.

Key findings of the report include:

  • Women-owned businesses differ from men-owned businesses in several ways.
  • While financial institutions report separate data related to the gender and race of their clients, almost none report data on the number of women of color entrepreneurs they serve.
  • Financial institutions targeting underserved entrepreneurs employ methodologies that diverge from conventional banking practices.
  • Demand for financing among underserved entrepreneurs significantly outpaces supply, particularly for those seeking midrange loans ($75K-$250K).

Recommendations to Support the Growth of Women and Women of Color Entrepreneurs

The research presented in the report underscores the need for targeted strategies and resources to enhance the effectiveness of financial institutions in catering to underserved entrepreneurs in Utah. The report makes several recommendations to address the identified gaps and support the growth and success of these businesses:

  1. Provide financial resources to institutions serving underserved populations to support more comprehensive data management, analyses, and reporting.
  2. Provide financial resources to institutions serving underserved populations to better market their products and services to businesses in these communities.
  3. Create a dedicated growth loan product serving women and other underserved entrepreneurs seeking midrange loans ($75K to $250K).

Explore the continuation of Project DEEP, focused on understanding the capital needs financial landscape and barriers to accessing capital for women and women of color entrepreneurs in Utah.

Our Partners

The second phase of Project DEEP was conducted by the Sorenson Impact Institute and generously funded by JPMorgan Chase Foundation.

Our Challenge

Understanding the capital needs, financing landscape, and barriers to accessing capital for women and women of color entrepreneurs in Utah.

Our Work

Sorenson Impact Institute produced a thorough report examining the role of financial institutions in Utah that provide financing to women and women of color entrepreneurs based on secondary research and analysis of data obtained from the U.S. Census Bureau Annual Business Survey and from interviews with financial institutions that target underserved entrepreneurs in Utah.