Small Business Owners’ Outlook for Credit Conditions Remains Pessimistic

February 13, 2024

Delaney Sexton
Contributing Editor

Small Business Owners’ Outlook for Credit Conditions Remains Pessimistic

“All eyes are on the Federal Reserve and how many rate cuts they might initiate this year. Given the strength of the economy, the Federal Reserve might prefer to leave rates where they are to fend off any inflationary forces that the late 2023 surge in the economy might produce,” writes NFIB economists Bill Dunkelberg and Holly Wade.

This is what the January Small Business Economic Trends report had to say:

• In January, 18% of small business borrowers paid a higher interest rate compared to three months before, but this is the lowest reading since July 2022.
• According to small business borrowers, the average interest rate paid on a short-term loan was 9.0% in January.
• Overall, 8% of small business owners expect credit conditions to worsen in the upcoming months.
• Almost a third of the respondents (29%) report borrowing at least once every three months.
• 6% of small business owners believe it was more difficult to get a loan in January than it was three months before. This is a slight improvement from the 8% reading in December.
• More than a quarter of owners claimed that all their borrowing needs were satisfied while 3% were unsatisfied.
• 5% of respondents reported that financing and interest rates were the single most important problem for their business.

Source:
NFIB January 2024 SBET