WASHINGTON—It isn’t just everyday Americans who lack the funds for an emergency.
A national survey of more than 2,500 diverse businesses shows nearly half of small business owners, and more small business owners of color, lack confidence in their ability to fund an unplanned $5,000 business expense.
In addition the survey, which was released by Reimagine Main Street, a project of the Public Private Strategies Group, which partnered with several other organizations, found Main Street entrepreneurs, especially those of color, lack confidence in their ability to finance growth opportunities such as a marketing campaign, a purchase order or contract, or to get a volume discount on an inventory purchase.
“At the same time, the survey finds a strong level of small business trust in the Small Business Administration (SBA), bucking the trend of waning trust in government institutions and pointing to public-private partnerships with the SBA as a potential solution to help Main Street,” Reimagine Main Street stated.
The Findings
Specifically, the survey found:
- 45% of respondents lack confidence to fund an unplanned $5,000 business expense. The survey found more AAPI, Black, and Latino/a entrepreneurs do not think they could fund an unexpected $5,000 than believe they could; most respondents lack confidence that they could find funds for regular business expenses that lead to growth, such as a marketing campaign, a new hire, or to purchase property or equipment, and Most entrepreneurs of color lack confidence they could finance a purchase order or contract or get a volume discount on an inventory purchase.
- 76% of Black, Latino/a, and White respondents report trust in the SBA, while 81% of AAPI respondents report trust in the SBA.
- Nearly half of respondents do not know about Community Development Financial Institutions (CDFIs) or Minority Depository Institutions (MDIs) and 41% of respondents are not familiar with FinTech lenders.
- 79% of respondents applied for a loan or other form of credit in the last 12 months. Of those who did, 83% were seeking less than $250,000 and 69% applied for less than $100,000.
A ‘Long Tail’
“While the Covid-19 pandemic may be receding, it’s clear the economic impact it had on small businesses across the country has its own long tail,” said Tammy Halevy, executive director of Reimagine Main Street. “Small business owners continue to struggle with inflation, tight labor markets, and supply chain disruptions, and it's crucial we equip Main Street entrepreneurs with the resources needed to build a more equitable small business economy. Now is the time to explore new solutions and co-investment from the private and public sectors.”
To view the full survey findings, click here.
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