More Than Half of Small Businesses Seek Less Than $100,000 in Financing
Small businesses need capital in small doses. That’s a takeaway of the latest study published by the Federal Reserve that revealed 57% of employer firms (with less than 500 employees) that applied for financing in 2018, sought $100,000 or less. 20% sought less than $25,000.
56% of all financing applicants said they applied in order to expand their business or pursue a new opportunity while 44% said the funds would be used to meet operating expenses.
47% of employer firms that applied for credit received all of the financing they sought. 19% said they received less than half of what they needed and 22% said they didn’t get anything at all.
Unsurprisingly, those that received nothing were categorized as high credit risk. The Federal Reserve defined that category as having a FICO score less than 620 or a business credit score between 1 and 49.April 22, 2019