By Scott Wright

FEMALE entrepreneurs launch their businesses with significantly less capital than men, and are much less likely to seek external funding than their male counterparts, research has found.

While more than half (53%) of female business owners plan to expand over the next three years, despite the uncertain political and economic outlook, more than three-quarters (78%) say they have never asked for third-party backing.

And women, on average, start their business with 53% less capital than men, a survey of 500 business owners in Scotland has found.

The survey, commissioned by Royal Bank of Scotland, comes just days Alison Rose began her tenure as the first female chief executive of the state-back lender. And it comes hard on the heels of a Government-commissioned report led by Ms Rose issued a raft of a recommendations to overcome the barriers faced by women as they look to establish their own businesses.

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The bank, which remains 62 per cent owned by UK taxpayers, said it commissioned the survey to better understand the challenges facing female business owners.

It published the findings as it simultaneously launched a campaign, titled Ask For More, under which it aims to “level the playing field for women” and provide help for those looking to grow their enterprises or move into business for the first time.

The survey found a greater percentage of male entrepreneurs than women would seek external funding to grow their companies, at 25% versus 21%.

It signalled that women are more anxious about the future of their businesses, with almost half (48%) feeling this way compared with 38% of male entrepreneurs surveyed.

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And it revealed worries over Brexit, with more than one-third of women entrepreneurs citing it as the biggest negative impact on their industries, excluding the fall in the value of the pound sparked by the vote to leave the European Union in 2016.

In other findings, the survey concluded that more than half of women (52%) have never asked for a pay rise.

Nearly four in ten (37%) said they lack the confidence to ask for a rise, and 22% said they do not feel comfortable talking about money.

Susan Fouquier, managing director of business banking at Royal Bank, told The Herald she was “not really” surprised by the findings of the report. She noted that an “underlying theme” was a general “lack of confidence” among women in business, despite the Rose report making clear that females lack neither ambition or ability.

“There is a bit of disconnect,” Ms Fouquier said.

She  added: “We have to remember that women tend to the majority of caring duties. There is an element of risk averseness in there.”

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Asked about the seeming reticence of women to take on external funding to grow their businesses. Ms Fouquier said while prudence can be a good thing, taking advantage of sustainable lending opportunities can be crucial, particularly with regard to issues such as cash flow.

“You need to be balanced,” she said. “A lot of businesses do not succeed because of cash flow issues or not having the right level of working capital. Debt is not a bad thing, actually, if it’s used well and safely.”

Ms Fouquier confirmed that the bank is already acting on some of the Rose recommendations, which suggested offering flexible loans to cover childcare costs and payment breaks when people have families among measures to increase levels of female entrepreneurship.

Royal’s direct response to the report includes a new partnership with Crowdfunder to establish the Back Her Business programme, under which it has pledged to offer up to 50% of crowdfunding targets -  a maximum of£5,000 - set by female-led start-ups.

The bank is also planning a series of events with women who have been “trailblazers” in business in Scotland, with guides and case studies to also be made available on podcasts.

Ms Fouquier underlined the importance of talking openly about some of the challenges women face in business, stating that this process can also bring to the fore subjects previously considered “taboo”, including pay. She said women should not be afraid to ask what their male counterparts are earning for doing the same job.