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More than 75% of surveyed small businesses are worried about access to credit

Published on16 MAY 2023

More than three-quarters of small business owners say they are concerned about their ability to access capital as banking stress prompts smaller institutions to tighten credit, according to our 10,000 Small Businesses Voices initiative, which conducts regular surveys of small enterprises in the U.S.

Just a year ago, 77% of respondents said they were confident about their access capital. Now the tables have turned, with the same percentage citing concern. Of the 17% who have applied for a new business loan in the past three months, 61% found it difficult to find affordable financing.

This shift comes amid an uncertain time for U.S. regional banks, caused in part by a rapid rise in interest rates. Silicon Valley Bank failed in March as prices on its long-term bonds fell and customers rushed to withdraw deposits, sparking turmoil throughout the banking system. In our survey, which was conducted April 20-25, 9% of the respondents said they transferred bank deposits as a result of bank failures.

The banking stress has hit smaller American businesses the hardest because they rely disproportionately on smaller banks. A separate report from Goldman Sachs Research finds that small businesses receive almost 70% of their commercial and industrial loans from banks with less than $250 billion in assets and 30% from banks with less than $10 billion in assets. That compares to just 45% and 10%, respectively, for larger businesses.


Attic Brewing of Philadelphia is one of the small businesses getting squeezed by the pullback in credit. The company, which was founded by Laura Lacy and her husband, Todd, in January 2020, managed to pull through the worst of the global pandemic thanks in part to government support programs — and through reinvention. The brewery invested in an 8,000-square-foot beer garden to help customers feel safe while also investing in a wholesale beer business to diversify their revenues, which topped $1 million last year. Attic Brewing is graduate of Goldman Sachs’ 10,000 Small Businesses education and capital program.

But they have been constrained by a lack of access to credit. The regional bank they do business with recently closed their $25,000 line of credit, which the couple maxed out to keep paying its workers and to account for a 30% across-the-board jump in their raw materials costs. Their only other credit source is a credit card with a $5,000 limit. They have to prepay for everything they require, including $1,700 per week for malt.

“We keep pushing ourselves to stay open but as soon as we feel we get a grasp on one thing something else comes out of left field,” Lacy said. “Everybody I’m talking to who needs a loan right now isn’t able to get one.”


Then there’s the impact of rising interest rates on existing debt. Some 60% say that rising interest rates are impacting their ability to service existing business debt, according to the 10,000 Small Businesses Voices survey, which was conducted by Babson College and David Binder Research and polled 1,740 small business owners from 48 U.S. states.

An uncertain business climate isn’t helping, Lacy and other small business owners say. Compared to three months ago, 44% of the respondents believe the economy has worsened, while 39% think it has stayed the same and just 15% believe it has improved. Despite government reports showing that inflation is moderating, nearly three-quarters say inflationary pressures have increased over the past three months, and nearly half complain of lower profits relative to pre-pandemic levels. 

Still, most of the survey respondents are looking to add workers, not to letting them go. Only 10% say they have had to lay off employees over the past three months due to economic conditions.  Attic Brewing has not only retained its employees but has increased its workforce from 15 to 25 employees over the past three years. Five have since been able to afford home purchases. Lacy is as proud of that fact as the national awards her beers have won, but she added that rising wage expectations are tough to meet. “Just making payroll right now is extremely stressful,” she said. “I’m confident we’re going to navigate this and get through this. It’s just going through it isn’t so fun.”

The labor market remains historically tight, putting upward pressure on wages. Here, the survey respondents say they see little relief. While 59% of the respondents are currently looking to hire, more than three-quarters say they’re finding it difficult to find qualified candidates.

While the U.S. labor-force participation rate continues to rebound back to pre-pandemic levels, four out of every five respondents see the lack of affordable childcare as a significant barrier to bringing more idled workers off the sidelines. Only 17% say there are more than enough or about the right amount of high-quality and affordable childcare programs in their community, and 80% support policymakers taking action to increase access to it.

Finally, the respondents are concerned Congress could fail in its negotiations to increase the federal government’s debt ceiling – nearly two-thirds of the small business owners say they will be negatively impacted if that occurs. In a related survey question, 90% said it was “very important” that the federal government avoid default. A substantial majority of respondents (81%) want to see Congress enact spending cuts in conjunction with raising the debt ceiling.


This article is being provided for educational purposes only. The information contained in this article does not constitute a recommendation from any Goldman Sachs entity to the recipient, and Goldman Sachs is not providing any financial, economic, legal, investment, accounting, or tax advice through this article or to its recipient. Neither Goldman Sachs nor any of its affiliates makes any representation or warranty, express or implied, as to the accuracy or completeness of the statements or any information contained in this article and any liability therefore (including in respect of direct, indirect, or consequential loss or damage) is expressly disclaimed.

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