Wendy Cai-Lee, founder and CEO of New York City-based Piermont Bank, in a recent interview to Banking Dive shared her insights on the trend of bankers establishing women-owned institutions to better service women-owned firms. Since its inception, Piermont made more than 50% of its lending in low- and moderate-income communities and to women- and minority-owned businesses, Cai-Lee has an active part in serving the real business need for women-owned firms.
Making the Case for Women-Owned Banks
Three women-owned banks have emerged in the past several years with the shared goal of increasing access to capital for female entrepreneurs.
Corinne Goble remembers when her mother tried to secure a loan for her trucking business in the late 1970s.
In addition to calling her loan a “leg loan,” an expression bankers at that time used to describe loans made to women based on attractiveness, her bankers said her husband would have to cosign.
“What the bankers didn’t know was my mom was running the trucking company and she and my dad were going through a divorce, and there was no way he was going to cosign on that loan,” said Goble, now the CEO of the Association of Women’s Business Centers.
Her mother’s experience as a female business owner trying to access capital was not unique, Goble said, adding that the struggles women have historically faced when trying to secure loans is “really why we exist.”
Goble joined the AWBC in 2019. The organization operates 145 women’s business centers funded through the Small Business Administration that provide coaching, education and access to capital for women entrepreneurs.
Helping women business owners access capital is in the organization’s DNA, Goble said.
“It’s the reason why we’re here. I just wish that 35 years later, we could tell you that we’ve overcome those barriers that women were experiencing back then,” Goble said. “We still hear stories across America of women being asked for their husband or for a man to cosign on a commercial loan, where a man presenting on paper, the same business, wouldn’t be asked for a cosigner.”
Financial firms are addressing this disparity, attempting to break down some of the barriers that women business owners face when trying to secure a loan. While some of the nation’s largest lenders have dedicated resources and launched initiatives aimed at increasing access to capital for female entrepreneurs, a new crop of women-owned de novos has emerged in the past several years, in an effort to help fill the gap.
When First Women’s Bank received regulatory approval to begin doing business in 2021, Marianne Markowitz, the bank’s president and CEO, touted the firm as the “the only bank in the country that is women-owned and women-led with a strategic focus on the women’s economy.”