The impact of female millennial business owners on the finance sector - Showtime Digital

The impact of female millennial business owners on the finance sector

03 July 2019 Read 15913 times

As the oldest millennials (GenY’s) are now 39 years old, they are entering new stages in their lives and have started to impact industries and make demands of them en masse.

We are seeing female millennial business owners engaging accountants, wealth advisors and non-bank lenders like never before and companies servicing this next generation must address millennial expectations or die.

Millennial 101

Millennials cover those people born between 1980 and 2000 (there is some conjecture on whether it’s 1995 – 2000). With the oldest GenY’s approaching 39 and the youngest aged 19-year-old, this generation accounts for a huge sector of your online audience.

Digging deeper, the second largest population group in Australia is the 30-34 age bracket and unlike any generation before them they come with a vast amount of languages, customs and attitudes plus they have different daily habits than prior generations.

Image1 Source

Image1 clearly shows females aged 30-34 to be the largest group since the 65-69 age bracket. While this is significant on its own, directly following this is the smaller, but still substantial 25-29-year-old followed by the 20-24-old age sector.

Female GenY business owners, as a collective, will be the largest female generation to impact the finance sector and Australia’s economy.

Our interest regarding female millennial SME’s relates to the growth in Australia in online finance enquiries over the 2018-19 financial year.

Facts matter over narrative

I think it’s important here to state we are here to focus on the facts and not the narrative. After all, if you’re going to spend your marketing dollars on moving with emerging markets the facts are the only metric that matters.

I say this because a SpotCap article was recently written for International Women’s Day titled – ‘How Fintech is Closing the Gender Gap in Business Funding’ (March 8th 2019). In the article it mentions, ‘In Australia, the number of female-run small businesses has grown by 46%, which is almost double of that to men over the same period’. Unfortunately, the article doesn’t supply the source of these numbers.

It does mention some credible people but the article does reference a seven-year-old, 2012 study compiled from 1400 US based Asian female business owners saying, ‘Approval rates for women are 15-20% lower than male-led businesses, according to international online credit resource, Biz2Credit’.

As I have said, let’s look today at the facts because who you market your services to today has changed.

The habits of millennials

As a group, Millennials exhibit a specific set of behaviours and bring with them experiences and beliefs which have not been seen in any generation prior.

As a company targeting GenY female SME’s, never have you had an opportunity to be so specific to an audience as large as this one and who are as adept to technological change on a global scale as they are.

Meeting the demands of this group over the next decade may require you to change everything you know about how to engage clients.

That’s not an easy task given the finance sector is taking fire from all sides right now.

As digital natives’ millennials have different attitudes to life, purpose and ownership. This perspective shapes their beliefs and how they interact and purchase. Millennials expect commoditisation of services which only a few years ago were out of reach to many of us.

Millennials expect maximum convenience at the lowest cost

Services like Lyft, Uber Eats and Airbnb enable us all to live the life of a millionaire at a fraction of the cost, all while being glamorous and Instaworthy. Millennials expect product transparency and price comparisons; they expect greater exposure to product information and peer reviews which support their purchase.

Unlike prior generations millennials are comfortable to test the boundaries of online convenience. Yes, millennials say quality is a key consideration, but the cost of the service is an even more important factor as compared to other generations.

To compete for this audience and to present your brand effectively, 34% of millennials say they like a brand more when they use social media. (Source: Association of National Advertisers, Barkley, SMG, BCG)

But which social platforms should you choose? A 35-year-old may use Facebook while her 24-year-old sister could use Snapchat. To complicate your channel strategy even more what about Instagram and LinkedIn? Knowing how you can fit into the life of your audience comes back to your audience discovery and the creation of your buyer persona’s. If you haven’t complied these for the last 18 months the definition of your market audience may already be inaccurate.

If you want to understand how to create buyer personas for your client base, download our “How to create buyer personas” eBook.

Living online means they buy online

How do millennials fund their business?

An April 2018 study into female entrepreneurship defined the following.

Over the lifespan of their business millennial male entrepreneurs more active in seeking finance for their business (34% as compared to 25% of women).

In 2018-19 male entrepreneurs were more likely to obtain loans or equity financing than women (38%, versus 31% of women).

Both male and female entrepreneurs sought financing for similar reasons related to starting or growing their business, with one exception: Men were more likely to seek financing for the purpose of launching a new product (26%, as compared to 22%). This suggests the differentiating factor between male and female business owners is the level of risk they are prepared to take in the early stages of their enterprise (Image2).

Image2 (Source:

So where is the shortfall and how are females seeking start-up funding? Well, it may come back to an individual’s education level.

Female millennial entrepreneurs are more likely to have a higher education level than their male counterparts.

If the focus of a person’s education is a business-related subject, there is less likelihood of them seeking external funding. If the focus of their education was humanities the respondent is more likely to seek funding from external sources.

When female SME’s self-fund, they more readily use credit cards than men to fund their business (Image3).

Image3 (Source:

Millennials and non-bank lending

In Australia millennials have markedly changed the consumer landscape in the non-bank lending sector. The millennial generation (from age 19-39) currently make up 32% of the search and 33% of the enquiries for funding in non-bank lending (Image4).

Additionally, the percentage of male/female applicants for all ages has narrowed to 53% - 47% respectively (Image4).

Image4 (Source: DataStudio)

Specialisation matters

In 2015 non-bank lending in Australia was in its infancy, it’s fair to say much of the marketing was focused on finance of last resort. Banks had unofficially turned off the tap and ‘alternative’ finance was pitched at SME’s who exhibited high levels of anxiety.

Today, millennials seeking business funding don’t have the bias of previous generations and don’t use terms like ‘Last Resort Finance’. They simply know the bank won’t lend to them, so they educate themselves online about where to find a solution.

Will millennials expect greater differentiation between product offerings? Some think so. Prospa has recently diversified their product suite to suit different needs.

As an example of this, within the non-bank lending sector is CloudFloat an SME lender who operates on a transaction-by-transaction basis. Finder asked, ‘Is this the AfterPay of small business’? That’s an interesting comparison considering a huge audience for Afterpay is millennial females.

Aleem Habibullah, the Founder of Cloudfloat said -

“From a demand perspective, we are seeing a demographic bias towards female business owners for the service and this is considerably emphasised in the 29 to 44 age group.

Use of technology can definitely flatten a lot of the preconceptions that are currently built into business financing and we’ve taken advantage of this by removing some of the friction that causes that, such as no face to face applications required and introducing 60 second on-boarding for ease and convenience while enhancing our rigorous adherence to KYC obligations under AML.”

For millennials, the search for external funding by males and females is approximately 55% - 45% respectively. For the 44+ age groups the figures are closer to 75% - 25%. That’s a huge change in one generation and service providers need to ask themselves candidly whether they are equipped to address the needs of this audience.

Don’t assume you know millennials

Now we have some facts on female millennial SME’s, and we know they are a sizable audience who are worth pursuing, don’t assume you know them at all.

If you’re older than this age group, you may recall your own beliefs at age 25 were vastly different than when you were 35 or older.

Only 15-20 years ago the ‘maturity journey’ (the personal journey from lifestyle to security-based values), may have been established by age 25 -30. The need for security-based values was brought about by the convergence of marriage, children and a mortgage.

With millennials that same maturity journey may take place a decade or more later. If this proves to be the case, a marriage, children and a mortgage will collide with the added need for financial security.

With GenY’s reaching 40 years of age they will suddenly realise they only have so many years left to build security and stability and that’s a heavy burden for a business owner who’s also managing a household. We expect online wealth services like robo-advisors to become popular in assisting in that financial stability.

As marketers the buyer personas we use to represent your core audience may change very quickly. One day you think you’re talking to a person with lifestyle-based values, the next your talking to someone with a totally different set of needs.

If older millennials can ‘flip’ from lifestyle to security-based values in a matter of 5 years, quick on their heels will be the 25-34 age group. The better you understand the older millennials, before they flip, the greater the opportunity you’ll have to meet the younger millennial audience at their stage in life and you’ll be better prepared to manage that flip.

There is nothing new under the sun

Yes, millennials will request greater transparency, they will expect slicker online environments, you will engage them on channels you may be uncomfortable with, but at the core of your communications are the needs, pains and gains of the individual.

That is the only constant.

Steve Palmer

Steve Palmer is the Joint Founder and CEO of Showtime Digital. Steve has been in B2B sales since 1997 but influencing people and behavioural science has been a long-term passion.

The magic he brings to his clients is in knowing how to engage their audience. His goal is to help businesses understand the deeper reasons of why consumers convert online with them.