Almost half (47%) of small business owners say that access to credit is currently a problem for their business, according a new national poll released today by the American Sustainable Business Council (ASBC). At the same time, large majorities want more innovation in credit delivery.
“It’s a serious problem for the economy that almost half of very small businesses still face a credit crunch five years after the financial crisis,” said Richard Eidlin, Director for Public Policy for ASBC. “The poll points to two obvious solutions to the access to credit problem: more well-regulated, financial services innovation and more competitive opportunities for local lenders.”
The scientific sample of owners of small businesses contained 38% businesses with two to four employees, 24% with five to nine employees, 18% with 10 to 19 employees and 20% with 20 to 99 employees. The poll found that 90% support allowing community banks, cooperatives, and credit unions to compete more actively with commercial banks. And it found that 57% support encouraging banks, venture capitalists and other investors to broaden their criteria to include the social and environmental benefits a company creates when deciding what companies and projects to fund. These are among the many innovative solutions currently being proposed by ASBC and others.
“Thanks to Congress passing the JOBS Act last year an innovative capital access idea—crowdfunding—is coming,” said Frank Knapp, Jr, president and CEO of the South Carolina Small Business Chamber of Commerce. Knapp is heading up ASBC’s efforts to promote investment crowdfunding through a super portal for all ASBC partner organizations. “Investment crowdfunding portals will empower everyday citizens to grow their communities by infusing small amounts of capital into locally-owned businesses,” said Knapp.
According to Claudia Viek CEO of CAMEO (California Association for Micro Enterprise Opportunity), “Job growth comes heavily from new business formation at the level of the smallest companies, so-called micro-enterprises. These companies are among the hardest hit by the continuing credit squeeze.”
ASBC’s poll also found that contrary to expectations, small business owners think the federal government needs to do more to strengthen the banking system. Seventy-nine percent said that the government has done a fair or poor job of making sure the banking system is solvent and adequately protected from future banking crises, bailouts, and shortages of credit. And 60% believe that the problem of “too-big-to-fail” banks taking on excessive credit risks needs more attention from the government.
The poll included 47% Republican, 14% Independent and 27% Democratic small business owners.
Poll results reported here represent findings from a scientific national phone survey of owners of small businesses (with 2 to 99 employees), commissioned by the American Sustainable Business Council and conducted by Lake Research Partners. The nationwide live phone survey was conducted between March 14-25, 2013. It has a margin of error of +/- 4.4%.
To view the full survey results, visit: bit.ly/ASBC_Credit_Poll_Report2013.
The American Sustainable Business Council and its member organizations represent more than 165,000 businesses nationwide, and more than 300,000 entrepreneurs, executives, managers, and investors. The council includes chambers of commerce, trade associations, and groups representing small business, investors, microenterprise, social enterprise, green and sustainable business, local living economy, and women and minority business leaders. ASBC informs and engages policy makers and the public about the need and opportunities for building a vibrant and sustainable economy. www.asbcouncil.org | @ASBCouncil
