August 12, 2019
By Mary Miller
Contributing Editor, Main Street Monday
Main Street Monday – Survey Reports More Difficulty for Small Business Owners to Get Bank Loans
According to the recently released Pepperdine Private Capital Access Index, many small business owners reported increased difficulty in securing a bank loan for their business.
The national survey of small business owners conducted between April 8 and May 17 indicated that slightly over 31 percent of small businesses were able to obtain a bank loan in the current quarter.
The survey defines “small businesses” as those with a revenue of less than $5 million annually.
At 31.6 percent, the current success rate is the lowest since Q4 2016, when it dropped to a low of 29.1 percent. Compare this to a 43.9 percent success rate in Q1 2019.
As 44.2 percent of small business owners sought a bank loan for financing, more potential borrowers turned to other resources:
- 54.5% turned to business credit cards
- 47.6% used personal credit cards
Additional popular alternatives include:
- Family or friends 37.7%
- Online business lenders 30.7%
- Trade credit 32%
Click here to read the Pepperdine Private Capital Access Index in its entirety.