Chicago will have its first bank startup since 2010 – First Women’s Bank. Ever since the 2008 financial crisis, few banks wanted to create start-ups in Chicago.
Now, a group of local women with experience in finance and banking want to start a commercial bank in Chicago, with a focus on lending to women-owned businesses.
Women Experience Difficulties Applying For Loans
The three co-founders — Lisa Kornick, Melissa Widen and Amy Fahey – feel female entrepreneurs still trail their male counterparts in accessing loans, even though women are increasingly owning more businesses. The number of women-owned firms has grown 68 percent since 2007. Some women, like Teresa Ging, who was trying to shift gears in her career, are rejected from a loan application on the mere basis that her income wasn’t high enough. She had collateral and a great credit score.
Even though there are attempts to close the gap between women and men owned businesses, it simply isn’t enough. During the Small Business Administration’s rollout of the federal Paycheck Protection Program, minority- and women-owned business owners said they had trouble accessing loans because they lacked relationships with larger banks or had trouble filling out the application. Trivial problems like these are what prevent women from achieving their goals.
First Women’s Bank Will Focus On Helping Women Get Loans
First Women’s Bank will focus primarily on businesses like hair salons, day care centers, bookkeeping firms and consulting firms. By focusing on these businesses, the application process can become a lot more transparent or facilitate more women business-owners to apply.
One of the co-founders, Marianne Markowitz, who led the U.S. Small Business Administration as acting administrator under former President Barack Obama, knows the reality of the lending process and why banks need to be at the forefront of changing this.
She says, “I know a lot about the gender lending gap from my time at the SBA. It’s real. It’s persistent. It’s up to banks to really solve it. This is really about supporting the women’s economy — the growth of which is led by women of color.”
First Women’s Bank is currently FDIC-approved and will hopefully open later this year or early 2021.