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Survey: Cash Flow Issues Continue to Plague Many Small Businesses

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Photo: © iStockphoto/Kutay Tanir

Staff Writer |

WASHINGTON — Cash flow issues continue to plague a significant number of America’s small businesses, according to the results of a new survey by the National Small Business Association (NSBA).

Access to Capital Survey findings show that nearly half (43%) of small-business owners report that they needed funds at one point in the last four years and were unable to find any willing sources.

“Not only have small-business owners been unable to find new credit over the last four years, nearly a third had their existing credit slashed and one in 10 had their loans called in early,” says NSBA President and CEO Todd McCracken.

Among the small-business owners who reported some change to their credit, 60% stated that the reason given was the bank’s internal risk assessment. Fifteen percent said they were given no explanation for changes to their credit.

Only small community banks and credit unions received a majority overall positive rating among small businesses asked to rate various lending institutions.

More than one-quarter of respondents changed banking institutions in the last four years, most often due to feelings of mistreatment.

On a positive note, 19% stated they are more likely to seek investors as a result of the crowdfunding exception included in the recently passed JOBS Act.

“While small businesses’ ability to garner financing has broad implications on the U.S. economy, nearly one-third use personal property—such as their home—to secure financing,” says NSBA Chair Chris Holman, CEO of Michigan Business Network.com and president of The Greater Lansing Business Monthly. “The financing issues small-business owners face don’t end when they close up shop for the day.”

Comments

Cash flow

    It seems when a small business owner like myself of a dry cleaners tries to get some kind of small loan for cash flow everyone says we are a big risk or that we are not big enough to qualify orthey are not lending at this time to our type of business.  So that leaves us in the outside looking in.  Even with the collateral available they tell me that they are to many dry cleaners closing there door.  So I guess I am stuck .  The only ones that are hounding to lend me are these advance money businesses the charge from 23 to 34 percent.  I aint going there.  So Where are all the incentives the feds promised us......

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