May 10, 2022
SBA Hot Topic Tuesday – 16% of Small Business Borrowers Reported Higher Relative Interest Rates
“Financial markets have already made significant adjustments to changes in Fed policies and the uncertainties of war and Covid shutdowns that continue in China. More is likely to come as assets, financial and real estate, are highly overpriced. Trying to ‘catch up’ runs a growing risk of ‘overshoot,’ hopefully that won’t happen,” writes Bill Dunkelberg, Chief Economist of the NFIB.
The NFIB’s April Small Business Optimism Index was released this morning showing that a net negative 50% of small business owners expect better business conditions in the next six months, but financing is not a top concern for small business owners.
Here are the facts about small business credit conditions:
• The number of small business owners that are borrowing at least once every three months increased by one point to 26%.
• 61% of small business owners are not interested in a loan, up three points from March.
• Only 1% of participants in the survey reported that financing was their top business problem.
• The number of business owners reporting that it is harder to get a loan than last month increased by one point. A net 4% reported it was harder to get a loan than three months ago.
• More than one-quarter of owners said all their borrowing needs were satisfied while 2% of owners reported that all their borrowing needs were not satisfied throughout the last three months.
• A net negative 5% of small business owners are expecting easier credit conditions in the next three months, down one percent from March.
• Of the owners that reported borrowing at least once every three months, a net 16% stated that relative interest rates are higher when compared to the interest rates three months ago, up 7 points from March.
• In April, the average interest rate paid on short-term loans by borrowers was 5.3%.