ATLANTA — A new survey shows small business owners are unsure where to turn for fast access to capital. This leads many owners, restaurateurs included, to file for bankruptcy prematurely.
According to a small business owners study commissioned by New York-based Capital Access Network (CAN), 79 percent of small businesses are undercapitalized and as many as 90 percent run the risk of filing bankruptcy or shutting down in the first five years.
Other findings include:
- 80 percent of small businesses have a greater need for funding today than they did one year ago.
- 82 percent of small businesses believe it is more difficult to get financing today than one year ago.
- The majority of respondents (56 percent) also indicated that they would consider starting a business in a new industry if they had access to more funding options, helping fuel the American economy.
- More than 55 percent of small business owners do not believe loans from friends or family are appealing.
- More than 45 percent of small business owners do not believe home equity lines or second mortgages are appealing.
- At least 73 percent of respondents were unaware that they can sell their future credit card sales in exchange for working capital.
- Only 6 percent had ever sold future credit card sales in order to get working capital.
- An overwhelming percentage, 92 percent, responded that they would find it appealing to have access to a financial product that could provide as much as $150K in working capital per revenue-generating location within 10 to 14 days.
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