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NFIB Survey: Soaring Interest Rates a Top Concern for Small Business Owners

Portrait of Starting small businesses SME owners, two Asian woman check online orders Selling products working with boxs freelance work at home office, sme business online small medium enterprise
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The NFIB Research Center recently published findings from its credit-focused survey, shedding light on the concerns of small business owners going into 2024. The survey, conducted via email from December 1-13, 2023, delved into banking activities, financing struggles, and the overall economic outlook as perceived by small business operators. Interest rates were the headline concern, with 80% of small business owners saying this was their biggest financial hurdle, up from 58% in the July 2023 iteration of the survey.

“Small business owners have been navigating higher interest rates since the Federal Reserve started hiking in March 2022, but have been increasingly affected by higher rates over the last six months,” the report stated. “…The health of the financial system is essential to small business operations, and this report offers insight into how well its serving their small business clients.”

Small Business Survey Takeaways: The Bad

So, how are financial institutions supporting small business owners and operators, especially as they aim to grow and scale? The NFIB survey results paint a somewhat bleak picture. Key takeaways include:

Most respondents think we’re already in a recession.

More than half (58%) of small business owners believe the U.S. is already in a recession. A significant portion foresee a recession happening in the near future, with 15% expecting it between January to March 2024.

Few are confident in their local economy.

Small business owners express reservations about the local and national economy heading into the New Year. Just 2% rated their local economy as excellent, and a worrying 67% assessed the national economy as poor, marking a 9% increase from July.

Satisfaction with financing options is dwindling.

Only 8% of owners were very satisfied with the amount and terms offered for received financing, a notable drop from 32% in July 2023. The survey also highlighted reasons for seeking financing, indicating that 29% aimed to expand their business, 26% sought funds for operational and inventory expenses, and 24% intended to replace capital assets or make repairs.

Small Business Survey Takeaways: The Good

Beyond the negative headlines, there are some bright spots regarding small businesses’ financial state. Among respondents who did not apply for financing in the past three months, 64% revealed that it was due to not needing financing at the time. Although this was a relative drop from the July 2023 installment (80%), there were other positive takeaways.

Regarding the financial state of businesses, 16% rated their current state as excellent, while only 8% considered it poor.

NFIB Survey: Soaring Interest Rates a Top Concern for Small Business Owners

by | Jan 3, 2024

Portrait of Starting small businesses SME owners, two Asian woman check online orders Selling products working with boxs freelance work at home office, sme business online small medium enterprise

The NFIB Research Center recently published findings from its credit-focused survey, shedding light on the concerns of small business owners going into 2024. The survey, conducted via email from December 1-13, 2023, delved into banking activities, financing struggles, and the overall economic outlook as perceived by small business operators. Interest rates were the headline concern, with 80% of small business owners saying this was their biggest financial hurdle, up from 58% in the July 2023 iteration of the survey.

“Small business owners have been navigating higher interest rates since the Federal Reserve started hiking in March 2022, but have been increasingly affected by higher rates over the last six months,” the report stated. “…The health of the financial system is essential to small business operations, and this report offers insight into how well its serving their small business clients.”

Small Business Survey Takeaways: The Bad

So, how are financial institutions supporting small business owners and operators, especially as they aim to grow and scale? The NFIB survey results paint a somewhat bleak picture. Key takeaways include:

Most respondents think we’re already in a recession.

More than half (58%) of small business owners believe the U.S. is already in a recession. A significant portion foresee a recession happening in the near future, with 15% expecting it between January to March 2024.

Few are confident in their local economy.

Small business owners express reservations about the local and national economy heading into the New Year. Just 2% rated their local economy as excellent, and a worrying 67% assessed the national economy as poor, marking a 9% increase from July.

Satisfaction with financing options is dwindling.

Only 8% of owners were very satisfied with the amount and terms offered for received financing, a notable drop from 32% in July 2023. The survey also highlighted reasons for seeking financing, indicating that 29% aimed to expand their business, 26% sought funds for operational and inventory expenses, and 24% intended to replace capital assets or make repairs.

Small Business Survey Takeaways: The Good

Beyond the negative headlines, there are some bright spots regarding small businesses’ financial state. Among respondents who did not apply for financing in the past three months, 64% revealed that it was due to not needing financing at the time. Although this was a relative drop from the July 2023 installment (80%), there were other positive takeaways.

Regarding the financial state of businesses, 16% rated their current state as excellent, while only 8% considered it poor.