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A not very optimistic outlook. Photo: Scott — Pixabay.

Small business owners struggle to access capital, report says

The survey comes as interest rates rise and lending standards tighten.


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The results of the new Goldman Sachs 10,000 Small Businesses Voices survey were recently published, which consulted 1,556 small business owners in the United States between Aug. 29 and Sep. 7, 2023.

Jessica Johnson-Cope, CEO and president of Johnson Security Bureau and chair of the National Leadership Council for 10,000 Small Businesses Voices, said in a press release:

Small business owners are hanging on by a thread, but the thread is getting increasingly thin as capital is becoming more difficult and more expensive to access, meaning many businesses are having to halt growth plans and consider cost cutting measures.

According to information released by the financial firm, American small business owners are struggling to access the capital needed to operate and grow their businesses, as interest rates rise and banks continue to tighten lending standards.

Likewise, one of the biggest concerns among respondents lies in the Federal Reserve's final Basel III proposal, an initiative they believe would make things even worse for them.

Key Findings

The new survey managed to capture the sentiment of many small business owners regarding the current economic outlook, highlighting the following responses:

  • Of the small business owners who have applied for a new business loan over the past year (28%), 70% reported it was difficult to access capital.
  • In contrast, 61% of loan applicants in the April 2023 Goldman Sachs 10,000 Small Businesses Voices survey said it was difficult to access capital in the prior three months.
  • 76% say difficulty accessing affordable capital has negatively impacted their business.
  • 73% say rising interest rates are having a negative impact on their business.

For its part, the Federal Reserve is seeking public comment on its Final Basel III proposal, with 84% of small businesses concerned the proposal will negatively impact their ability to access capital in an already difficult market.

In Jul. 2023, the Federal Reserve proposed a rule that will require large banks to further increase the amount of capital they hold.

"Small business owners appreciate the work of Congress to examine the impacts of the Federal Reserve’s Basel III Endgame as we are concerned the proposal will only worsen the ability of many small businesses to access capital,” added Johnson-Cope.

A variety of policymakers, organizations, and banks have publicly stated that higher capital requirements will lead to reduced access to loans and credit for households and consumers.

More Findings

Other key data points from the survey include:

  • 68% of small business owners have outstanding business loans or lines of credit.
  • Of these, 58% have a fixed interest rate, while 42% have a variable interest rate.
  • 63% of those with outstanding loans or lines of credit say rising interest rates have impacted their ability to service their existing debt obligations.
  • 68% of those with outstanding loans or lines of credit say they would not be able to maintain current operations or grow their business without their business loan or line of credit.

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