Small businesses are essential building blocks of our economy, and it is important to support them as much as possible. However, cash flow can often be a big hurdle for small businesses – many rely on cash reserves and borrowing in order to finance their operations. Being able to access cash quickly is key for any small business owner looking to grow or just stay afloat.
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Data for today’s episode is provided by Mercator Advisory Group’s report – U.S. Small Businesses are Reeling as a Result of COVID-19
Cash Flow and Borrowing Are on the Minds of Small Business Owners:
- In 2019, 37% of total respondents claimed that it was “definitely” a good time to borrow, compared to 15% in 2020.
- Similarly, the proportion of small business owners who claimed it was “probably” a good time to borrow was cut in half.
- 24% of small businesses claim it’s “definitely not” a good time to borrow in 2020.
- Interestingly, 5% of small businesses earning $5-10m claim their firm “never borrows” in 2020, while only 1% claimed that in 2019.
- In 2020, 22% of small businesses expressed “extreme concern” about cash flow, versus 17% in 2019.
- 60% of small businesses earning $5-10m expressed significant increase in concern about cash flow due to COVID-19; 56% of small businesses overall expressed the same.
- 5% of small businesses overall expressed a significant decrease in concern over cash flow due to COVID-19.
About Report
Mercator Advisory Group’s new Insight Summary Report, 2020 Small Business PaymentsInsights, COVID-19 and B2B Payments & Cards – The Result of the Pandemic, reveals that U.S. small businesses have a much less positive view of the future than in previous years. The report is the first of three from Mercator’s annual Small Business PaymentsInsights Survey Series, a part of Mercator’s Primary Data Service. It is based on findings from Mercator Advisory Group’s online survey of 2,000 U.S. small businesses fielded in March and April 2020.
The report details the ways COVID-19 has changed small businesses and their outlook on the near-term future of their businesses. The report also provides insight into how small businesses bank and pay for goods and services, their banking relationships, how they view technology and their top business concerns.
“Small businesses have been hit hard by the pandemic. In many ways, more than their larger counterparts. Organizations that service small business have an opportunity to help these firms as they try to come out of the COVID crisis,” states the author of the report, Pete Reville, Director of Primary Data Services including Small Business PaymentsInsights Survey Series at Mercator Advisory Group.