It should be. Small business owners have significantly contributed to the American economy for decades. Yet, while access to financing has improved, it is still nowhere near where it should be.
This is the conclusion drawn from the newly released report “2023 Women & Minority Business Owner Spotlight” by Bank of America. The study is filled with interesting and thought-provoking statistics.
Overall, 46% of small business owners surveyed intend to expand their businesses in the next 12 months, and 77% plan to obtain financing for this. Their preferred sources of funding are:
• 54% – credit cards
• 46% – personal savings
• 35% – personal credit cards
• 24% – traditional bank loans
• 18% – family and friends
While this is a positive sign, it is somewhat concerning that the first choice for financing is credit cards, which typically carry the highest interest rates.
Furthermore, in another optimistic data point, many women and business owners who are part of minority groups anticipate an increase in revenues and a strong year ahead:
• Black entrepreneurs: 86%
• Hispanic-Latino entrepreneurs: 63%
• Women entrepreneurs: 63%
• Asian American/Pacific Islander entrepreneurs: 54%
However, as optimistic as these entrepreneurs may feel at the moment, the sad reality is that many believe they will never have equal access to capital throughout their lives:
• Black entrepreneurs: 35%
• Women entrepreneurs: 31%
• Hispanic-Latino entrepreneurs: 20%
• Asian American/Pacific Islander entrepreneurs: 20%
But overall, the study shows that American entrepreneurs are optimistic about having a robust business year ahead. Concerns about a potential recession have decreased. According to Sharon Miller, president of small business and head of specialized banking and lending at Bank of America, “Although they faced several obstacles and challenges last year, today’s entrepreneurs continue to persevere and move forward with their growth and expansion plans.”
If you are looking for financing, take a look at the SBA Lender Match, a tool to help small business owners find funding in their communities (www.sba.gov/funding-programs/loans/lender-match-connects-you-lenders).
Another interesting tool is the “Access to Capital Directory” from Bank of America and Seneca Women, a database designed to help entrepreneurs (not just women) learn about funding sources from organizations supported by Bank of America and organizations that support minority entrepreneurs.
(www.accesstocapitaldirectory.com)
Source: Currents