Right before Christmas, Ashlie Ordonez sold her wedding ring. The mother of five hoped the $12,000 would keep her business afloat for a bit longer, despite what it cost her emotionally.
"I came from a trailer park, and I had a $12,000 ring on my hand," Ordonez, who owns the spa Bare Bar in Denver, said. Since she launched the business in 2020, she doesn't qualify for Paycheck Protection Program loans.
Ordonez is one of millions of women who own a business and care for young children, a balancing act that was made even more difficult by the pandemic. A new report from the National Association of Women Business Owners and the human-resource-software maker Gusto — which surveyed 1,199 female entrepreneurs in the US about their experiences during the pandemic — found 31% of female business owners in the poll had school-age children at home.
Sixty-one percent of such owners reported that school closures affected their companies, and 30% said they had to scale back on work because of childcare needs. Ordonez's mom helps care for her children, and her husband still works, so they funnel whatever leftover money they have back into the business. But it's still not enough: She set up a fundraising campaign to keep Bare Bar going.
Overall, female-owned businesses and companies run by people of color fared worse in the pandemic. Between February and April last year, the number of female-owned businesses fell by 25%, while Black-owned companies dropped by 41% and Latinx businesses experienced a 32% drop, according to the National Bureau of Economic Research.
On April 28, President Joe Biden unveiled his infrastructure plan that includes proposals for childcare funding, universal pre-K, and $225 billion over a decade to create a paid medical and family leave program. The latter aims to reduce racial disparities in wage loss and improve employee retention.
Female business owners with children, like Ordonez, along with experts say the government needs to raise awareness about benefits and offer better support for these communities.
The government needs to offer more financial aid for female business owners with children
Female business owners need better access to government aid and financing, said Luke Pardue, an economist at Gusto who focuses on how public policies can help small businesses. Of the women with school-age children in the Gusto survey, 59% reported receiving PPP loans, compared with estimates that 72% of the broader population received PPP loans.
"Relative to the shock they've endured, we would expect" that number to be higher, Pardue said, adding: "It's very concerning that these women haven't been able to access the aid and support programs that the government has introduced."
Lawmakers need to focus more aid on microbusinesses and sole proprietors
The Small Business Administration defines a small business as employing fewer than 500 people, but Cristina Morales Heaney, the chair of the National Association of Women Business Owners, said the government needed to take a closer look.
"We really need our lawmakers to look at the definition of a small business," said Heaney, who also owns US Safety Services, a San Antonio medical-services and staffing company. A majority of the National Association of Women Business Owners members are sole proprietors or have between 10 and 20 employees, she added. "These small businesses' needs and access to capital are very different and there needs to be parity."
One of the major criticisms of last year's PPP was that funds didn't go to microbusinesses or sole proprietors, who were also suffering during the pandemic. In response, Biden included additional aid for these companies as part of his $1.9 trillion relief plan.
"It's crazy how these microbusinesses have just fallen on the back burner and we're not recognized," said Ordonez, who considers herself the owner of a microbusiness and shares Heaney's sentiment.
A tax credit for paid leave passed by the Trump administration went unnoticed and unused
Only 26% of entrepreneurs from the survey reported making claims via the Families First Coronavirus Response Act. That is a direct result of a lack of awareness, Pardue said.
The law, signed by President Donald Trump last March, requires companies with fewer than 500 employees to provide limited paid-leave benefits to workers who are affected by the pandemic. Additionally, smaller employers are given a new tax credit and federal payroll-tax relief to pay for the benefits.
"This was essentially free money provided to small businesses, but there was very low take-up," Pardue said, adding that survey respondents reported not being aware of the program or how to claim the benefits. "While the program is laudable, it needs to be simplified, and awareness needs to be increased."
Female business owners can find support elsewhere, but that help goes only so far
For those who don't want to wait on lawmakers, there are more grassroots options. Female business owners with children should start by finding a community where they can talk to people in a similar situation, said Jill Salzman, the creator of the community for mother entrepreneurs called Founding Moms.
While it may not feel like they are taking action, it can provide support and camaraderie, Salzman added.
Lastly, reach out to your local chamber of commerce or business community and ask if there's a support system in place for what you need, "whether that's your own emotional well-being, childcare, or whatever the thing is that you need," Salzman said.