ABSTRACT
This chapter uses pecking order theory (POT) to investigate two competing propositions relating to the provision of bank financing for female-owned new ventures. Carter et al. argues that extant literature "provides unequivocal evidence" that female-owned new ventures are associated not only with lower overall levels of capitalization but, more importantly, with lower ratios of debt/equity financing. The 5 Cs of commercial bank lending include: capacity, capital, collateral, character and conditions. Capacity relates to owner's ability to meet all financial obligations as they fall due. Blake argues that although 5 Cs are gender blind they are not necessarily gender neutral. Treichel and Scott find that females are less likely to apply for bank loans and, where they do apply for loan, size of their loan application will be smaller. Interestingly, Watson, Newby and Mahuka reports that for male- and female-controlled firms less than five years old there is no significant difference in terms of either their total bank debt or leverage.
