In 2023, there was a noticeable increase in applications for access to capital across various financial products such as lines of credit, business loans, personal loans, home equity loans, real estate loans, and cash advances compared to the previous year. Despite the challenges faced by small businesses in the area, these financial tools were being used to help them make ends meet and provide support until they could improve their business prospects in the future.
However, there was a significant decrease in loan applications from the U.S. Small Business Administration (SBA) with a 30% drop in 2022 compared to only an 11% decline in 2023. This indicates that small businesses are increasingly seeking financial assistance from alternative sources rather than traditional lenders like the SBA. According to a survey conducted by researchers at Harvard Business School, many small business owners reported increased costs of goods and services, weak sales and high operating expenses as their top three financial challenges. Operational challenges such as hiring qualified employees, increasing sales and dealing with issues in the supply chain were also common concerns for many businesses.
Despite these challenges, there was a sense of optimism among business owners who believed they were able to survive the difficulties they faced. Many saw hope that businesses were starting to overcome these challenges and were less frequently reporting ongoing struggles in their operations. This reflects a resilience among small businesses and a belief that they can navigate through tough times and come out stronger on the other side.
