Studies of finance and finance availability have provided very different findings, depending on whether they were undertaken in Europe or North America. European studies undertaken by Carter
(2000) and Sandberg (2003) found that males were more likely to make use of bank loans and overdrafts than females. In fact females were less likely to use or rely on financial institutional arrangements including cheaper sources of finance such as extended supplier credit than were their male counterparts. The UK study also showed that, on average, the capital expenditure on actual start-up by female owner/managers was 33% of that spent by males.
Not only do males and females differ in their use of finance, but Carter (2000) and Sandberg (2003) have shown that access to finance differs between male and female owner/managers. The studies have shown that while financial institutions may have a non-discriminatory policy, the application of those policies stereotypes and prejudices women.
The increased difficulty of obtaining finance by female owner/managers have affected four areas of financing:
• The ability to raise start-up finance (Carter, 2000)
• Differences in guarantees required to attract financing (Carter, 2000; Sandberg, 2003)
• Attraction of ongoing finance through females failing to penetrate the informal financial networks (Sandberg, 2003)
• Sexual stereotyping (Carter, 2000)
By comparison, studies carried out in North America (Bowlin & Renner, 2008; Carrington, 2006; Orser, Riding, & Manley, 2006,) suggest that female business owners were as likely as men to seek most types of external finance. These studies also found that male female and executives receive comparable salaries after allowing for differences between companies e. g. performance, size and pay philosophy.