February 14, 2023
SBA Hot Topic Tuesday – More than 50% of Small Business Owners are Uninterested in a Loan
NFIB’s January Small Business Economic Trends report was published today, and small business owners are feeling slightly more optimistic about business conditions but are still concerned with the small business economy. Here is what the report had to say about credit conditions and capital spending:
• A slight increase, 26% of surveyed small business owners reported that all their credit needs were met. Unchanged from December, 2% of small business owners reported that all their credit needs were not satisfied.
• 60% of owners are not interested in a loan, a 2% decline from December.
• A 1% drop, 6% of owners stated that their last loan was more difficult to obtain than their previous loans.
• Also decreasing by one point, 8% of owners expect credit conditions to worsen in the next three months.
• One-quarter of small business owners reported paying a higher rate on their most recent loan, up two percent.
• On average, small business borrowers paid 7.6% on short-maturity loans in January.
• Almost 30% of small business owners reported borrowing at least once every three months, a 1% increase.
• 59% of small business owners made a capital expenditure in the last six months, up four points from December.
• The two most common expenditures were for equipment (42%) and vehicles (24%)
• Just over 10% of owners reported spending money on new fixtures and furniture for their small businesses.
• 14% of firms improved or expanded facilities, and 8% acquired new buildings or land for expansion.
• Most firms (28%) spent $50,000 or higher on capital expenditures in the last six months.
• 21% of small business owners are planning capital outlays in the next few months, down 2% from NFIB’s December reading.
• 7% of owners believe the next three months will be a good time to expand, up 2% from December and the highest reading since February 2022.
• Those that believe it is a good time to expand cited sales prospects and economic conditions as reasons for their expansion outlook.