While women are gradually gaining ground in UK business leadership, significant gaps persist across sectors, regions, and access to finance. New analysis from Funding Circle, drawing on the UK Gender Index and other datasets, reveals that while one in five active UK companies – approximately 1 million of the 5.2 million – are female-led, a funding gap is holding female-led businesses back.
Female leadership is slowly increasing across UK businesses. Generational trends show that younger founders are slightly more likely to be women, with female representation among Gen Z-led businesses rising from 18.7% in 2024 to 20.28% in 2026. Millennials mirror this pattern at 20.13%, while Gen X and Boomer-led companies lag behind at 18.63% and 18.19%, respectively. Despite these gains, progress toward gender parity remains slow and inconsistent across industries.
Sectoral differences highlight persistent barriers
When we look at the sectors in which female founders are highly represented, we find that the representation varies dramatically by industry. Certain sectors are more gender-balanced. Sectors linked to care, education and services show significantly higher levels of female leadership.
Top sectors for female-led businesses:
Sector Name | Total companies | Female-led | % Female-led |
Health, wellbeing and social care | 226,778 | 90,667 | 39.98% |
Education | 104,072 | 37,693 | 36.22% |
Public health and safety services | 11,126 | 3,773 | 33.91% |
Service sector | 240,809 | 76,584 | 31.80% |
Arts, entertainment and recreation | 125,475 | 30,531 | 24.33% |
By contrast, many technical and infrastructure sectors remain heavily male-dominated. Lowest representation sectors. Energy (5.65%), Construction (7.93%) and Mining (9.78%) all see low female led representation. These gaps highlight how industry culture, skills pipelines and historical workforce patterns continue to shape business leadership.
Regional trends mirror national averages but differ in scale
Across the UK, female-led businesses account for roughly 1 in 5 companies in most regions. London leads in absolute numbers with 292,247 female-led businesses, followed by the South East (136,108) and the North West (97,908). Regions such as Scotland (18.01%), the North East (17.65%), and Northern Ireland (17.53%) lag behind, often due to higher concentrations of traditionally male-dominated industries.
The West Midlands comes out as the region with the highest shares of female-led companies, at 19.75% of companies in this region being female-led. While the differences are small, these regions may benefit from more diverse business landscapes and stronger service-sector economies, which tend to have higher rates of female entrepreneurship.
Regions | Total companies | Female-led | % Female-led |
West Midlands | 419,197 | 82,810 | 19.75% |
London | 1,494,220 | 292,247 | 19.56% |
East Midlands | 290,212 | 56,742 | 19.55% |
South West | 342,544 | 66,601 | 19.44% |
South East | 702,924 | 136,108 | 19.36% |
The investment gap remains a major challenge
Despite growing numbers of female entrepreneurs, access to investment remains uneven. Female-led businesses consistently receive a smaller share of loans, venture capital and equity deals than male-led companies. This funding gap can limit growth potential, particularly for firms in high-growth sectors such as technology and advanced manufacturing. According to the data, out of 53,910 angel investments, only 2,934 of these are for female-led businesses, a tiny 5.44%.
Angel investments: 5.44%
Venture capital: 4.66%
Private equity: 3.63%
Understanding the barriers
Research indicates that several factors may contribute to disparities in why female founders are seeking less funding:
Perception of being ‘risk averse’: Many female entrepreneurs have the perception of being ‘risk averse’ and are more cautious about taking on debt, often prioritising low-risk financing or avoiding borrowing altogether. Women’s perceived greater risk aversion can limit access to funding, as investors often favour founders who appear more confident and fast growth-oriented. This can lead to smaller loan applications or avoidance of external finance. It’s important to understand when and what financing is right for your business.
Female founders report greater difficulty accessing funding: A UK report found that 86% of female entrepreneurs said they had trouble accessing finance to grow their business, compared with 76% of men, and 17% said access to funding was one of their top concerns for future growth. Barriers included finding suitable investors (36%), lack of networks (31%), and uncertainty about the right funding options (31%).
Lack of confidence or financial literacy can deter applications: A UK survey by Small Business Britain showed 58% of women business owners take out no external finance, with nearly four‑in‑five (79%) self‑funding their businesses, and 57% saying lack of business knowledge or confidence is a barrier to growth. These patterns support research suggesting women are more cautious about debt and may feel less prepared to engage with lenders.
Perceptions of bias deter female founders: Female investors are twice as likely to back women, but women hold just 15% of positions on investment committees. This under-representation contributes to unconscious bias, with decision-makers tending to favour entrepreneurs who reflect their own backgrounds and experiences. A survey conducted by Pink Salt Ventures, an early-stage investment firm, found that 83% of surveyed female entrepreneurs cited a lack of female decision-makers as the most significant barrier to securing funding.
Momentum in lending signals growing confidence
Encouragingly, Funding Circle data shows that by improving access to credit, they have seen a surge in female-led business engagement with finance since 2023:
Applications from female-led businesses increased 60% year-on-year from Q2 2023 to Q2 2025
Approved applications rose 81%, outpacing the 56% increase among male-led businesses
The total value of approved funding also grew strongly, increasing by 112% for female-led businesses compared with 78% growth for male-led businesses.
Tiana Portugal, VP, Sales and Marketing at Funding Circle said: “Improving access to credit is core to Funding Circle’s proposition. Our technology allows us to make fair lending decisions based on data rather than personal opinion. Our biggest challenge is encouraging more women to apply for funding, and this has been our focus over the past few years. By refreshing our brand positioning and increasing female representation in both our marketing and leadership positions, we have been able to accelerate growth in applications for women-led businesses.”
Methodology
The analysis draws on multiple datasets, including the UK Gender Index, Funding Circle lending data, Companies House records, angel, venture capital, and private equity investment data, as well as surveys and reports from Small Business Britain and Pink Salt Ventures.
