The first bank built by women for women in Chicago.

First Women’s Bank received a conditional approval earlier this month from the Federal Deposit Insurance Corp. Marianne Markowitz, who is expected to become the bank’s CEO, said the approval was a “significant milestone.”

The new bank, which will focus primarily on female entrepreneurs, is likely to open its doors for business in 2021. It will be Chicago’s first all-new bank after the GFC of 2008, and will perhaps locate in the Goose Island neighborhood. (Built In)

First Women’s Bank

“Women-owned businesses are growing 2x faster than the national average, yet they receive just 16% of all conventional business loans,” says the bank’s website. “It’s time for a bank with a strategic focus on women.”

A paper by Cornerstone Capital Group, an impact investing advisory firm, said last month that:

• Women-owned businesses are growing at a rate of 21 percent since 2014
• Those owned by women of color are the fastest-growing of any entrepreneurial cohort
• Unfortunately, companies started or cofounded by women are starved of capital. They received less than half the investment capital of those founded by men
• But female-founded companies generate 10 percent more cumulative revenue over a five-year period than male-founded startups
• And this is really interesting: women-owned businesses, including those owned by colored people, played a huge role in turning around the economy after the 2008 recession. They added 1.8 million jobs between 2007 and 2012.
• In contrast, businesses owned by white males lost 800,000 jobs during the same period.

Women’s businesses

Abigail Scanlan, director of the Chicago-based Women’s Business Development Center, wrote in an email to Built In that a bank such as First Women’s would have a better understanding of the needs of women-owned small businesses.

“This is a great opportunity for women entrepreneurs to unite, build support, and create a community where we can close the gender gap in accessing capital for women-owned small businesses,” Scanlan said of First Women’s Bank.

Scanlan revealed that most women-owned businesses raised capital from family, friends, or their retirement savings. Many used their credit cards.

A 2017 report by the U.S. Senate Committee on Small Business and Entrepreneurship found that, on average, women launched companies with nearly half the amount of money as men.

The report also revealed a glaring inequity: In 2017, companies founded by women founders made up less than five percent of all venture capital deals.

“I know a lot about the gender lending gap from my time at the SBA,” Markowitz told the Chicago Tribune. “It’s real, it’s persistent. It’s up to banks to really solve it.”

Markowitz was acting administrator of the Small Business Administration between February and April of 2014.

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Image Source: First Women’s Bank