PurposeThe　operational　framework　of　external　financing　in　the　correlation　between　the　gender　of　entrepreneurs　and　firm　performance　remains　to　be　resolved.　This　study　aims　to　investigate　the　mediating　effect　of　external　financing　on　gender-based　disparities　in　private　firm　performance　and　to　explore　its　heterogeneity　within　the　Chinese　context.Design/methodology/approachBased　on　national　data　from　the　10th　to　13th　Chinese　Private　Enterprise　Survey,　this　study　used　a　bootstrap-based　mediation　effect　model　to　analyze　the　role　of　external　financing　as　a　mediator　in　the　relationship　between　entrepreneur　gender　and　firm　performance.FindingsThis　study　found　that　external　financing　is　a　constructive　mediator　between　entrepreneur　gender　and　firm　performance.　Heterogeneity　analysis　revealed　that　external　financing　plays　a　complementary　mediation　role　in　the　impact　of　entrepreneur　gender　on　performance　in　West　China.　In　the　tertiary　industry,　external　financing　acts　as　the　sole　mediator　for　the　impact　of　gender　on　firm　performance.　Notably,　this　mediating　effect　is　present　in　non-startups　but　not　in　startups.Practical　implicationsThe　findings　suggest　that　external　financing　can　improve　the　firm　performance　of　female　entrepreneurs.　Governments　and　policymakers　should　strengthen　financial　support　for　female　entrepreneurs　in　West　China,　tertiary　industry　and　non-startup　enterprises.Originality/valueThis　paper　contributes　to　the　literature　on　gender　and　corporate　governance　by　shedding　light　on　the　mediating　role　of　external　financing　in　the　relationship　between　the　gender　of　business　owners　and　firm　performance.