February 10, 2016

By Bob Coleman
Editor, C-Suite Wedneday

C-Suite Wednesday — NSBA Says 73% of Main Street’s Credit Needs Met

From the NSBA 2015 Year-end Economic Report…..

Although access to capital has improved for small firms—the number of small firms able to garner financing today is at its eight-year high of 73 percent—one-in-four small firms still cannot access adequate financing. Another indicator of financial improvement is the number of firms who increased employee compensation over the last 12 months (57 percent) and those who plan to do so in the coming 12 months (60 percent), both numbers are the highest they’ve been in eight years.

Nearly one-in-five small firms experienced an increase to their lines of credit or credit cards, the highest this indicator has been in six years. This indicates both that the financial standing of small business is improving, and that banks and other lenders appear slightly less risk-averse than they were the preceding several years.

There also exists the possibility that expected Fed rate increases have positively encouraged lenders to provide more financing to their small-business clients.

The absence of capital continues to hinder small-business owners’ ability to finance increased sales and increase inventory to meet demand.

Nearly one-in-five small firms say lack of capital availability has rendered them unable to finance increased sales.

On the positive side, however, there was a notable drop, from 18 percent in July 2015 to 14 percent today, in the number of small firms that had to reduce their workforce due to an inability to garner adequate financing.

Please click here to download the full NSBA 2015 Year-End Economic Report.