PHILADELPHIA, PA — Pennsylvania small business owners – much like the U.S. Government – are facing a credit crunch, with 53% of respondents reporting they have struggled with their ability to access capital. Coupled with 78% of Pennsylvania small business owners who are concerned with accessing affordable capital, the credit crunch was a key theme from a new survey of small business owners from Goldman Sachs 10,000 Small Business Voices released during National Small Business Week.
“Many small businesses, and particularly African American businesses such as my own, struggle with access to capital. My business, for example, is routinely denied lending because the banking industry labels me as a subscription credit repair business instead of a fintech company that helps businesses get access to capital,” said Kevin Lewis, CEO of Premisien Credit Counseling in Philadelphia. “This dynamic is happening across the country – small business owners are misunderstood and underserved. Rising interest rates and tighter credit conditions have made it far more difficult to access affordable funding to support small business growth. Legislation opening up capital opportunities for small businesses and modernizing the Small Business Administration are both objectives that Congress must consider.”
Pennsylvania small business owners also voiced concern about the debt ceiling fight in Washington, with 64% saying they would be negatively impacted if Congress does not raise the debt ceiling and 80% saying it is important for the federal government not to default on its debt. Sixty-five percent of those surveyed said it is important for Congress to enact spending cuts in conjunction with raising the debt ceiling.
“No one knows the exact date when the federal government will no longer be able to pay its debt, but these survey results make clear that a default would have very negative ramifications for small business owners,” said Joe Wall, national director of Goldman Sachs 10,000 Small Businesses Voices. “Over the coming weeks, America’s small business owners will be looking to Washington for certainty and a sound resolution to the nation’s credit crunch.”
Hiring and retaining workers continues to pose a challenge to Pennsylvania small business owners, with 80% of those currently hiring finding it difficult to recruit qualified candidates. The surveyed small business owners say (82%) that a lack of access to childcare continues to be a barrier to workforce participation with only 24% saying there are more than enough or the right amount of high-quality and affordable childcare options in their communities. Pennsylvania small business owners strongly support (84%) policymakers taking action to increase access to affordable childcare.
Other notable data points from the survey of Pennsylvania small business owners include:
- Sixty percent said inflationary pressures on their small business have increased over the past three months.
- 70% of small businesses said they are actively hiring.
- Looking at their bottom line post-pandemic, 70% say their profits are the same or lower than they were before the pandemic.
- While the collapse of Silicon Valley Bank rattled global markets and put the spotlight on banks, only 13% of small business owners transferred their bank deposits as a result.
- Small business owners are keeping an eye on emerging technology, like artificial intelligence (AI). Seventy-one percent are watching news about AI closely, with 36% believing AI could have a positive impact on their business and 15% saying it will have a negative impact.
This data is based on a survey of 104 Pennsylvania Goldman Sachs 10,000 Small Businesses participants conducted by Babson College and David Binder Research from April 20-25, 2023.
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