What do small business owners think about credit, capital and cash flow?

Our new infographic reveals details about the state of small-business finances — and the findings may surprise you.

Cash flow and the costs of running a small business are top challenges for today’s owners, according to a survey by the Federal Reserve Bank of Cleveland.

Small business daily income averages just $7 per day above daily expenses. Health-care services see the greatest net income at about $21 per day. That’s far higher than the average net income at restaurants ($11 per day), professional services companies ($7 per day), repair and maintenance businesses ($6 per day), retail outlets ($4 per day), and personal service businesses ($3 per day).

But small businesses have a harder time obtaining bank loans than big businesses. For companies with revenues under $5 million, only 38 percent of those attempting to secure a loan were successful. Meanwhile, 70 percent of businesses with revenues between $5 and $100 million who seek a loan are successful. Common rejection reasons from a survey of more than 200 business owners included low cash flow, small size of the company, a short operating history or insufficient credit.

But did you know that small business owners are less likely to have revolving bank cards with balances more than 90 days past due? Small business owners have an average credit score of 721, according to a study by ACA International. That’s 48 points higher than the average consumer’s score of 673.

For a better chance at obtaining a loan for your small business, visit a small, local bank. They approve loan applications from small firms far more often!

Want to improve your chances of finding financing for your small business? Download our Financial Management Workbook for guidance on every aspect of small business finances. Then meet with a SCORE mentor to discuss your finances and small business goals.

About the Author(s)

 Bridget  Weston

Bridget Weston is the CEO of the SCORE Association, where she provides executive leadership and works directly and collaboratively with the Board of Directors to establish the vision and direction of SCORE.

Financing Challenges Don’t Stop Small Businesses