Cash Reserves are the Number One Solution for Main Street Financial Challenges
April 2, 2025
Bob Coleman
Founder & Publisher
Cash Reserves are the Number One Solution for Main Street Financial Challenges
One of the best small business Trend and Outlook reports is produced by the Federal Reserve Consortium of 12 Banks. This year’s report is no different and contains a number of insightful statistics to help you understand the current economic environment for small businesses.
The report is attached here, and I will highlight significant trends over the course of the next month.
Today’s focus is on the breakdown of how Main Street businesses respond to financial challenges.
The top responses were to draw cash from personal resources and cash reserves:
- Used personal funds: 55%
- Used cash reserves: 51%
- Raised prices: 48%
- Borrowed money: 38%
- Cut staff hours and expenses: 36%
- Made a late payment or did not pay debt: 24%
The demand argument in small business lending:
59% of small businesses on Main Street sought some type of financing in the last 12 months.
Use of proceeds:
- Working capital: 56%
- Expansion or business acquisition: 46%
- Borrowing money for future credit needs: 40%
- Equipment: 27%
- Debt refinance: 27%
