Small business owners are breathing a sigh of relief. After years of struggling to find cash to sustain and grow their businesses, there is finally some good news. According to a new survey, two-thirds of small businesses applying for credit today receive the full amount.
The MetLife & U.S. Chamber of Commerce Small Business Index (SBI) for Q3 of 2018 achieved the highest level in the history of the survey, with a score of 69.7. This is exactly the direction the government, industry experts and business owners alike were hoping for. Ever since the financial crisis of 2008, access to capital for small businesses has been a huge challenge.
According to the survey, 67 percent of business owners received the full amount of financing they applied for. Another 11 percent received a partial amount, while 15 percent were rejected.
The high level of optimism in the economy and government intervention have both been credited with this improvement. As the economy has strengthened and the government has been proactive in improving access to small business funding, more businesses have found the financing they need.
U.S. Chamber vice president of small business policy, Tom Sullivan, says, “We are moving in the right direction, but more policies that ease small businesses’ access to financing need to occur to ensure this vital sector of our economy continues to grow, create jobs, and positively impact communities across the country.”
The survey also revealed information about where small businesses are spending their funds. This insight is helpful to those who continue to try to improve access to small business funding when business owners need it the most.
- 27 percent of respondents plan to use the loans they receive to purchase new equipment.
- 20 percent will use the funds to expand or upgrade facilities.
- 11 percent will put the cash towards keeping their doors open.
- 9 percent shared the cash will be used for inventory.
- 4 percent of respondents will use the cash for starting their business
- 4 percent will use the funds for payroll.
- And 4 percent will put the capital towards expanding into new markets.
Other helpful findings from the survey include business owners personal opinions on how well their business is performing. 64 percent reported good overall health. In addition, eight out of ten business owners said they were comfortable with the current status of their cash flow. One in five businesses have also hired new workers over the past year.
Why Small Businesses are Still Using Cash Advances
The study also noted that businesses that have been operating for longer are more likely to get full funding. This is one of the many reasons why business owners are still turning to a merchant cash advance. Alternative lenders continue to be a great alternative for those who need cash quickly, but do not have the time in business to secure a traditional business loan.
If you process through an ISO and want a merchant cash advance, you can secure a merchant advance ISO through First American Merchant. If not, you can still secure a merchant cash advance with First American Merchant and have cash in hand in as little as 24 hours.Get Started Now