SBA Hot Topic Tuesday – Small Business Owners Paying 8% Rate on Short-Term Loans

December 13, 2022

Delaney Sexton
Contributing Editor

SBA Hot Topic Tuesday – Small Business Owners Paying 8% Rate on Short-Term Loans

“Going into the holiday season, small business owners are seeing a slight ease in inflation pressures, but prices remain high,” says Bill Dunkelberg, NFIB Chief Economist. “The small business economy is recovering as owners manage an ongoing labor shortage, supply chain disruptions, and historic inflation.”

Credit Market
• 3% of small business owners reported that financing was their top business problem, the highest reading since December 2018.
• Almost a quarter of small business owners are paying a higher rate on their most recent loan.
• The average rate paid on short-maturity loans was 7.9% in November, the highest reading since March 2008 and a 1.3% increase from October.
• Since October, there was a 4% decrease in the number of small business owners with all their borrowing needs met (22%).
• In November, only 2% of owners reported that all their borrowing needs were not satisfied.
• Compared to three months ago, 5% of borrowers said their last loan was harder to obtain.
• 62% of owners are not interested in applying for a loan.
• 27% of all small business owners are borrowing on a regular basis.

Inflation
• In November, over half of small business owners raised average selling prices.
• More than a third of small business owners plan to raise prices.
• The industries with the most frequent price hikes were wholesale, retail, construction, and manufacturing.
• The number one reported reason for small businesses having lower earnings was due to increased costs.

Source:
NFIB November Report