July 11, 2012

State of Alabama
Press Release: Alabama Department of Commerce

Small Businesses Still Battle Funding Shortage, Survey Finds

July 11, 2012

Fleet Owner Staff

According to a new survey from the National Small Business Association (NSBA), cash flow issues continue to plague a significant number of small businesses in the U.S., with 43% saying that at times over the last four years they were unable to locate funding sources to fuel their operations.

"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 ten had their loans called in early," noted Todd McCracken, NSBA’s president and CEO, in a statement. "What's worse, 19% of those whose loans were called in early were given less than 15 days to pay the full balance of their loans."

The group’s 2012 Small Business Access to Capital Survey also found that among small-business owners who reported some change to their credit, 60% said the reason given was their bank's internal risk assessment. Underscoring the relatively negative impression many survey respondents expressed with lending institutions, 15% reported they were given no explanation for changes to their credit, according to NSBA’s poll.

Small businesses were asked to rate various lending institutions and only small community banks and credit unions received a majority overall positive rating. More than one quarter of small-business respondents said they changed banking institutions in the last four years, with feelings of mistreatment the most common cause.

In addition to traditional financing issues, respondents reported a notable increase in client payment times, with 55% of small subcontractors reported late payments from a prime contractor.

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