Small Businesses Appear Optimistic About Growth Despite Critical Cash Flow Issues, According to Latest Pathward Research
Pathward Surveyed 1,000 Small Business Owners to Identify Financing Needs
Based on a survey of 1,000 small business owners and executive decision-makers, the report aims to uncover their financing needs compared to the loan products available to them. Despite indicating optimism for future growth, the survey results reveal
“Accessible financing is one of the most critical levers of small business success. When a company’s cash flow is under pressure, the inability to deliver on goals can be catastrophic,” said
Faced with economic headwinds, small businesses have an array of loan options at their disposal – yet the survey revealed mixed experiences and lack of familiarity when they need financing. With business viability so tied to a solid financial footing, understanding options - and having the comfort to explore them - is vital for sustainable growth.
Notable among the survey’s findings:
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The largest small businesses are struggling with cash flow the most: For the seven to 12 months of the year preceding the survey, 34% of small businesses reported having just enough cash on hand to stay operational. This primarily applied to companies with annual revenues of more than
$10 million (48%) and 50+ employees (46%).
- Small businesses are feeling the effects of cashflow challenges: Four in five small businesses (81%) experienced the consequences of a cash flow issue. More than a quarter had to delay a planned expansion (27%) or were unable to capitalize on an opportunity (25%) while 22% reduced staffing.
- Lack of familiarity limits funding options: Only 32% of small businesses felt they were knowledgeable enough about asset-based loans to explain them to another person – compared to SBA loans (60%), business line of credit (57%), and equity financing (39%).
“Cash flow has a substantial consequence on small businesses. Ninety-two percent (92%) of the companies in our survey who anticipate the need for financing over the next year have experienced the impact of cash flow problems, from delaying product launches to reducing staff,” said
To learn more about how small businesses are faring in today's environment and their financing habits and needs, you can download the full report on Pathward.com.
Learn more about Pathward’s Commercial Finance solutions at Pathward.com/Commercial.
Methodology:
The survey was conducted online in
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Source: Pathward