The U.S. Small Business Administration announced National Small Business Week will be held from May 5-11, 2019. We understand the many challenges facing small business today, from developing a business model, choosing a location, securing funding, hiring, training and retaining employees and achieving profitability. It is no surprise that only approximately 80% of small businesses survive their first year, and by year two only 70% of businesses are still in operation. Fast forward five years from start date, and only around 50% of small businesses have their doors open. A recent article in Barron’s reported the sobering statistics that according to the Kauffman Foundation, the number of new start-ups in the U.S. is approximately half of what it was 30 years ago and according to the World Bank, the U.S. currently ranks 53rd in terms of ease of starting a new business.
While the challenges are many, small businesses are the backbone of the American economy.
From 2000 to 2017, small businesses created 8.4 million net new jobs while large businesses created 4.4 million. In other words, small businesses accounted for 65.9% of net new job creation in the period. Small businesses are also critical for underserved populations. In 2012, 8 million businesses were minority-owned; there were 9.9 million women-owned firms; and veterans owned 2.5 million small businesses. Also, while much is said about immigration in the news, and not all of it favorable, 14.4%, of business owners were immigrants and without their contributions to the workforce our economy would suffer immeasurably.
We know from experience that one of the biggest difficulties for small business owners is access to capital. The most common source of capital to finance business expansion is personal and family savings (21.9% of small businesses), followed by business profits and assets (5.7%), business loans from financial institutions (4.5%), and business credit cards issued by banks (3.3%).
Some of the most common reasons small business owners find it difficult to secure financing are:
- Poor Credit Score
- Limited Collateral
- Poor Cashflow
- Too New / Startup
- Existing Debt
- Improper / Insufficient Documentation and Paperwork
- Unfavorable Economic Conditions
At Imperial Advance, we offer our small business clients a wide variety of small business working capital solutions, such as business term loans, revenue-based financing, lines of credit and merchant cash advance options. Unlike traditional “big banks”, we are able to deliver customized financial solutions with flexibility and speed of funding that typical lenders cannot match.
One of the many reasons for our success serving small business clients is because of the strength of our relationships with multiple lending companies which allow us to offer the most competitive interest rates on business loans. When small business clients work with us. They know we are able to obtain and evaluate quotes from multiple lenders in order to recommend the best options for financing and working capital.
So from all of us at Imperial Advance to all of the small businesses around the country, Happy National Small Business Week!