The Gallup Organization conducted a survey in November-December 2009 for The National Federation of Independent Business Research Foundation (NFIB) of 751 small business employers (employing people 1-250) to help better understand the small business credit crisis.
Below are some of the survey’s key findings (as reported by The Secured Lender:
- 55% of small businesses attempted to borrow in 2009.
- 23% of those businesses were not able to have all of their credit needs met (which dropped significantly from earlier in the 2000s when up to 90% of businesses had their credit needs met).
- The financial institution extending a line of credit changed the terms/conditions of the line(s) during 2009 for 29% of small businesses.
- The most frequent “change” was increased interest rates for small businesses.
- The best predictors of success in meeting the credit needs were higher credit scores, customers of banks with less than $100 billion in assets, more properties collateralized for business purposes and fewer second mortgages held.
- Most common planned purpose of credit rejected was to fill cash flow needs. (SIDE NOTE: Payroll Funding and Invoice Factoring companies are used every day to fill cash flow needs.)