Celebrated each May, Small Business Month is a month-long celebration of small businesses. It highlights the courage, community efforts, and hard work small business owners exhibit day after day. Small businesses are truly the backbone of the U.S. economy, but they’re facing unprecedented challenges, including a major credit crunch. Read on to learn about some of the obstacles small business owners are facing when it comes to credit, and how the National Foundation for Credit Counseling can help.
It’s a Challenging Time for Small Business Owners
Small businesses are currently facing a challenging financial situation thanks to several factors, including the rising costs of materials, gas prices, and a tight labor market. Combined, these challenges are creating a difficult cost structure that can have a negative impact on a small business’ cash flow. Also, since many small business loans are adjustable-rate loans, the cost of existing debt is growing and adding to the financial burden—if you’re able to secure a loan in the first place.
Recent events have made banks more reluctant to lend to small businesses. It’s causing a credit crunch for small businesses as they search for non-bank, alternative sources of credit for working capital and money for growth. Small business owners enjoy a quicker speed of transaction and approval from these lenders, but it comes at a price in the form of higher interest rates—much higher than the banks charge.
In short, turbulence in the banking sector is causing significant problems for American small businesses. In addition to already taut lending standards and rising interest rates, accessing capital has become even more challenging. Unfortunately, this is a harbinger of bad times for the U.S. economy. As bankers point out, things will hardly improve going forward—and small businesses should focus on preparing themselves for the coming challenges.
Small business owners must familiarize themselves with the available options for capital infusion, including grants and loans from various organizations. Additionally, looking for ways to cut costs and increase operational efficiency could soften the effects of tight lending standards and worsening economic conditions.
How NFCC Helps Small Business Owners
The National Foundation for Credit Counseling wants to help keep your business in the green. By working directly with an NFCC small business credit counselor and an NFCC Member Agency, you can take control of your finances and set your business on the path to success. Nonprofit credit counseling can provide valuable insights into managing your money, reducing debt, and planning for the future. With the right guidance, you can transform your stress into success and establish a firm financial foundation for your business. Here’s how we help:
NFCC Proudly Supports America’s Small Businesses
NFCC champions small businesses across the country. We care about small business owners and want to work with you to address your most pressing personal and business financial challenges. Whether you’re planning for growth or need help tracking your expenses, our credit counselors can help. Contact us today at 855-515-0961 for support!
This content was originally published here.
