Based on a new survey from Goldman Sachs, small business owners are facing a credit crunch, with 77 percent of respondents reporting they are concerned about their ability to access capital, a stunning shift from one year ago when 77 percent said they were confident in their ability to access capital.
This jarring turnaround is just one key takeaway from a new survey of small business owners from Goldman Sachs 10,000 Small Businesses Voices released today during National Small Business Week.
Of respondents who have applied for a small business loan in the past three months (17 percent), 61 percent have found it difficult to access affordable capital. Sixty percent said rising interest rates are impacting their ability to service existing debt.
“Rising interest rates and tighter credit conditions have made it far more difficult for small business owners to access affordable funding to support growth,” says Randy Finch, owner of the Ice Guru in Grand Rapids, and an alum of Goldman Sachs 10,000 Small Businesses program in Michigan.
“These compounding challenges offer yet another reason why Congress should modernize the U.S. Small Business Administration, the agency charged with making certain small business owners have abundant access to capital.”
Small business owners also voiced concern about the debt ceiling fight in Washington, with 65 percent saying they would be negatively impacted if Congress does not raise the debt ceiling and 90 percent saying it is important for the federal government not to default on its debt.
Eighty-one percent of those surveyed said it is important for Congress to enact spending cuts in conjunction with raising the debt ceiling.
“No one knows the exact date when the federal government will no longer be able to pay its debt, but these survey results make clear that a default would have very negative ramifications for small business owners,” says Joe Wall, national director of Goldman Sachs 10,000 Small Businesses Voices. “Over the coming weeks, America’s small business owners will be looking to Washington for certainty and a sound resolution to the nation’s credit crunch.”
Hiring and retaining workers continues to pose a challenge to small business owners, with 78 percent of those currently hiring finding it difficult to recruit qualified candidates. Small business owners say (80 percent) that a lack of access to childcare continues to be a barrier to workforce participation with 17 percent saying there are more than enough or the right amount of high quality and affordable childcare options in their communities.
Small business owners strongly support (80 percent) policymakers taking action to increase access to affordable childcare.
Other notable data points from the survey of small business owners include:
- Seventy-one percent said inflationary pressures on their small business have increased over the past three months.
- Compared to three months ago, 44 percent said the business climate has gotten worse, with 39 percent saying it has stayed the same.
- Looking at their bottom-line post-pandemic, 48 percent say their profits are lower than before the pandemic.
- While the collapse of Silicon Valley Bank rattled global markets and put the spotlight on banks, only 9 percent of small business owners transferred their bank deposits as a result.
- Small business owners are keeping an eye on emerging technology, like artificial intelligence (AI). Sixty-seven percent are watching news about AI closely, with 38 percent believing AI could have a positive impact on their business and 15 percent saying it will have a negative impact.
This data is based on a survey of 1,740 Goldman Sachs 10,000 Small Businesses participants conducted by Babson College and David Binder Research from April 20-25, 2023. The survey included small business owners from 48 U.S. states, Washington, D.C., and Puerto Rico.
Goldman Sachs 10,000 Small Businesses was launched more than a decade ago to provide best-in-class business education along with access to capital and support services. It has reached more than 13,000 small business owners across all 50 states, Puerto Rico, and Washington, D.C. to date.
In Michigan, 10,000 Small Businesses partners with Wayne State University in Detroit to deliver the program. More 700 Michigan business owners have completed the program. Michigan small business owners can apply at www.10KSBapply.com.
Goldman Sachs 10,000 Small Businesses Voices is an initiative for program participants to organize and advocate for policies that matter to them. It builds on Goldman Sachs 10,000 Small Businesses, which over the past decade has provided access to education, capital, and support services to more than 10,000 small business owners across all 50 states, Puerto Rico, and Washington D.C.
Source: dbusiness.com
