Main Street Monday – Credit Conditions Tighten for Most Small Business Owners

May 8, 2023

Delaney Sexton
Contributing Editor

Main Street Monday – Credit Conditions Tighten for Most Small Business Owners

Data from an April Goldman Sachs survey showed a prominent shift in small businesses’ ability to acquire capital, a shift that occurred in only a year’s time. Lou DeCuzzi, the President of DDR USA in Brunswick, Ohio, says on the topic: “Rising interest rates and tighter credit conditions have made it far more difficult to access affordable funding to support small business growth. These compounding challenges offer yet another reason why Congress should modernize the Small Business Administration, the agency charged with making certain small business owners like me have abundant access to capital.”

Here is what the Goldman Sachs survey found:

  • 77% of small business owners were concerned about their ability to access capital in April. A year before, 77% of small business owners were confident that they could access capital.
  • In the last three months, 17% of small business owners applied for a new business loan.
  • Of the 17% that applied, 61% of them stated that finding access to affordable capital was difficult.
  • Rising interest rates affect 60% of small business owners’ ability to service their existing business debt.
  • Less than 10% of small businesses transferred their bank deposits after the failure of Silicon Valley Bank.
  • About half of small businesses are earning profits lower than their pre-pandemic profit levels.
  • A quarter of owners are making higher profits and another quarter are earning profits that are the same as before the pandemic.
  • Small business sentiment reveals that owners believe the economy has worsened in the last three months (44%). This is a slight improvement from the 48% that held this perspective six months ago.
  • More small business owners believe that the economy is unchanged (39%) when compared to their responses in September 2022 (30%).

Goldman Sachs Release