August 10, 2022
C-Suite Wednesday – Less Small Business Owners’ Borrowing Needs are Satisfied says NFIB
“The uncertainty in the small business sector is climbing again as owners continue to manage historic inflation, labor shortages, and supply chain disruptions,” says Bill Dunkelberg, NFIB Chief Economist. “Job openings and their plans to fill them are historically very high. But everything else is down, capital spending plans, inventory investment plans, expected real sales way down, the environment for expanding negative, interest rates rising, it doesn’t add up to an optimistic outlook. As we move into the second half of 2022, owners will continue to manage their businesses into a very uncertain future.”
In the NFIB’s July Small Business Economic Trends report, the Small Business Optimism Index rose by almost half a point. Even with the rise, it is the sixth consecutive month of the optimism index being below the average 48-year average of 98. Additionally, the Uncertainty Index rose 12 points from June to 67 in July.
Here’s the data on credit conditions:
• An increase of two points, 2% of small business owners reported on the survey that all their borrowing needs were not satisfied.
• Conversely, 25% of small business owners had all their borrowing needs satisfied, down two points in July.
• 62% of small business owners are not interested in a loan (one point increase from June).
• Up two points, a net 5% of small business owners said that their last loan was harder to get than their previous attempts.
• A net 7% of small business owners expect worse credit conditions during the next six months, a 2% increase.
• Only 1% of owners reported that financing was their top business problem in July.
• More than a quarter of small business owners surveyed reported borrowing on a regular basis (every 3 months).
• The average rate paid on short maturity loans was 5.86% in July.
• A net 19% of small business owners reported paying a higher rate on their most recent loan, up 3 points from the previous month.