WASHINGTON, March 8, 2022 – Two years into the pandemic, more than half of small businesses report being in fair or poor financial condition according to a meta-analysis performed by SCORE, mentors to America’s small businesses and a resource partner of the U.S. Small Business Administration.
Most small businesses have not applied for loans, even though 54% of entrepreneurs who didn’t apply for loans needed funds. Of the small business owners who did apply for outside financing, 63% used those funds to meet basic needs such as wages, rent and inventory costs, rather than to grow their company.
When loans were granted, small businesses struggled to receive the full financing they needed. Even among small businesses with low credit risk, only 38% received the financing they sought, compared to 62% at pre-pandemic levels.
Despite these loan issues, there is cause for optimism as small business loan approvals have increased nearly 10% from 2020 levels across all types of financial institutions.
SCORE can guide small business owners seeking loans and financing options
“Small business owners are being inundated with a number of challenging issues,” said SCORE CEO Bridget Weston. “Whether it's the labor shortage, supply chain issues, the rising cost of goods or general economic uncertainty – entrepreneurs are struggling. However, we want small business owners to know they don’t have to do this alone. SCORE has a number of resources to help navigate these obstacles in order to help you succeed.”
Entrepreneur and SCORE client Chris Rourk, founder of Miami-based VOLTA ion, reflects on how SCORE helped him secure finances and get his business up and running during continued economic challenges: “When everything seems to be against you is when the strongest foundations are built. Having my SCORE mentor by my side to shine light on new ideas opened a world of opportunities to pursue, but it is oneself that has to have the courage to work hard and go after these leads in order to succeed.”
SCORE mentors can provide free guidance on managing finances, the loan application process and which loan is the best fit for your business.
To find a mentor to help your small business, visit SCORE.org/find-mentor.
Since 1964, SCORE has helped 11 million entrepreneurs to start, grow or troubleshoot a business. SCORE's 10,000 volunteers provide free mentoring, workshops and educational services to 1,500+ communities nationwide, creating 45,027 new businesses and 74,535 non-owner jobs in 2020 alone. Follow @SCOREMentors on Facebook, Instagram and LinkedIn.
Funded [in part] through a Cooperative Agreement with the U.S. Small Business Administration.