Chicago’s newest bank sets sights on women-owned businesses
A planned Chicago startup bank that would cater to women-owned businesses has won final approval from the Federal Deposit Insurance Corp. and is expected to open its doors to clients nationwide this fall.
First Women’s Bank, which received the FDIC’s approval earlier this week, is the first new bank to be chartered in Illinois since 2010.
The bank was founded by women and its mission is to help women-owned businesses grow by providing access to capital, said President and CEO Marianne Markowitz.
“Women own 42% of businesses in the U.S.,” Markowitz said. “We have built First Women’s Bank with their unique preferences in mind and in a way that only a women-owned, women-led bank could.”
Markowitz is a former executive at the Small Business Administration and served as its acting administrator in 2014.
Women-owned businesses often struggle to obtain bank financing. The number of firms owned by women increased by much as the national average in 2019, according to the State of Women-Owned Businesses Report, commissioned by American Express. Yet the Small Business administration reports women-led businesses receive just 16.2% of the total amount of conventional business loans.
This represents an opportunity for banks serving female entrepreneurs, Markowitz said.
“The small business economy is snapping back and we’re seeing the need for…acquisition and start-up capital,” Markowitz said.
Organizers initially intended to raise $50 million but decided to stop fundraising after receiving about $30 million from more than 200 investors. The bank must maintain a leverage ratio of about 8%, which would give it roughly $375 million in lending capacity.
“Because the market conditions are so favorable for a bank with our strategy and mission, we decided to stop the offering so we could commence operations now,” Markowitz said.
Among the investors is tennis legend Billie Jean King will continue to support the bank and serve as an advisor on gender equity issues.