Small businesses continue to struggle with cash flow issues, according to the 2012 Small Business Access to Capital Survey by the National Small Business Association.
In fact, 43 percent of respondents say they needed funds during a time in the last four years but could not find any willing sources.
"Not only have small-business owners been unable to find new credit over the last four years, nearly a third had their existing credit slashed and one in 10 had their loans called in early," says NSBA President and CEO Todd McCracken. "What's worse – 19 percent of those whose loans were called in early were given less than 15 days to pay the full balance of their loans."
Of the respondents that experienced some change to their credit, 60 percent say the reason given was the bank's internal risk assessment while 15 percent of respondents report receiving no explanation for changes to their credit.
Respondents also only ranked small community banks and credit unions with an overall positive rating, and more than one-quarter of respondents say they changed banking institutions in the last four years mostly because of feelings of mistreatment.
The survey even finds that respondents are experiencing longer client payment times, and 55 percent of responding small subcontractors cite late payments from a prime contractor. Still, 19 percent of respondents say they are more likely to seek investors because of the crowdfunding exception included in the Jumpstart Our Business Startups Act.
"While small businesses' ability to garner financing has broad economic implications, nearly one-third use personal property, such as their home, to secure financing," says NSBA Chair Chris Holman, CEO of Michigan Business Network.com and president of The Greater Lansing Business Monthly. "The financing issues small-business owners face don't end when they close up shop for the day."