July 14, 2021
C-Suite Wednesday – 59% of Small Business Owners are not Interested in Loans
“The economy is running ‘hot’, although at a slower pace,” reads the NFIB’s June Small Business Economic Trends report. Most small businesses’ sales and earnings are increasing, but inflation is increasing along with it.
Here are some key statistics:
Access to Capital
• Borrowers have less need for loans with 59% of borrowers saying they aren’t interested in applying for loans.
• 25% of borrowers’ needs are satisfied which is a 2-point increase from May. 3% of borrowers are unsatisfied.
• 2% of borrowers had a harder time obtaining their last loan compared to their previous attempts.
• 1% of borrowers are paying a higher rate on their most recent loan, and 1% of owners said that financing was their top business problem.
Small Business Sales
• A net 9% of small businesses report having higher sales, up two points since May.
• More small business owners are expecting higher sales in June. 2% of owners expected higher sales in May, and in June, 7% of owners are expecting higher sales.
Small Business Earnings
• Small business owners are reporting higher profits in June. Although it is still negative, positive profits increased from -11% to -5%.
• Those who reported lower profits cited material, labor, and regulatory costs along with taxes as their main reason for lower profits.
• Sales volume was the next most cited reason for lower profits, and lower prices followed as the most reported reason for lower profits.
• Those who reported increased profits most often credited their sales volumes.
• A net 47% of small business owners raised their average selling prices in June, up 7 points from May. This is the highest reading since January 1981.
• A net 44% of business owners report planning price hikes in June, up 1 point from May.
• Price hikes are the most frequent in wholesale (82% higher, 4% lower), retail (63% higher, 1% lower), and manufacturing (62% higher, 5% lower).
• 54% reported higher average prices, and 5% reported lower average selling prices.