WASHINGTON — A nationwide Internet survey of 500 small business owners found that availability of credit is a problem inhibiting growth and job creation.
Commissioned by the American Sustainable Business Council, Main Street Alliance and Small Business Majority and conducted by Lake Research Partners, the survey reports that access to credit is a stumbling block for 90 percent of respondents. These small business owners strongly support increasing the lending authority of community banks and credit unions.
Small business lending has become such an issue that 82 percent of respondents support more stringent credit card regulations, such as clearer identification of terms and interest rate caps. Additionally, 61 percent say it’s harder now than it was four years ago to get a loan.
The poll also asked respondents about proposals in the president’s American Jobs Act. Nearly 70 percent of small business owners support committing $50 billion to new and existing infrastructure projects that would generate jobs, such as making improvements to roads, bridges and water systems. Another 59 percent favor creating a nationwide wireless network and improving the accessibility of high-speed wireless services.
“Loans that will help small businesses grow and create jobs are harder and harder to come by,” said John Arensmeyer, founder and CEO of Small Business Majority. “With banks’ lending portfolios shrinking and small businesses’ dependence on credit cards growing, lawmakers need to look for smart ways to revamp the credit landscape.”
Additional findings in the report:
- 52 percent of those surveyed have turned to credit cards to finance their business.
- 6 in 10 small business owners support making loans more accessible by reducing collateral requirements.
- 77 percent support creating incentives for community banks to lend more.
- By a 2 to 1 margin, small businesses support increasing credit unions’ lending cap from 12.25 percent to 27.5 percent.
- 73 percent of small employers believe their business has been hurt to some degree by the drop in consumer demand resulting from the housing and mortgage crisis.
- 57 percent of respondents agree reducing the principal on underwater mortgages to the current market value would boost consumer spending, helping small businesses regain their vigor through increased profits.
The survey was conducted between Dec. 8 and Jan. 4. It has a margin of error of +/- 4.4 percent.
“Small businesses create 65 percent of the net new private sector jobs in America,” said David Brodwin, co-founder and board member of ASBC. “Our deregulated, damaged banking system isn’t providing the credit they need, and they are calling for change.”