In our third breakout of our State of Local research, we will focus on the Economic and Community Outlook which allows us to better understand the decision-making framework local businesses will employ in the future.
While many businesses reported positive economic results, environmental factors have businesses worried about the current state of the economy. These concerns foreshadow challenging decisions that businesses may face soon. The survey findings suggest that businesses are anticipating a need to navigate a potentially uncertain economic landscape and may be compelled to make difficult choices to safeguard their financial stability and adapt to evolving market conditions.
The majority of respondents are very or somewhat concerned about both the U.S. (90%) and local economies (71%), as well as the small business landscape broadly across the U.S. (78%)and locally here in Richmond (72%). Moreover, they are concerned about their own businesses’ financial security (68%).
Economic conditions, such as the increase in interest rates, might be playing a role in preventing a nationwide recession, but they are having adverse effects on local businesses. Some individuals surveyed have already been forced to acquire extra funding for their businesses. In light of this, we delved into the impacts these changes have had on obtaining funding.
The survey revealed that within the last six months, 40% of the participants have needed to obtain capital. Among those who pursued capital, a substantial proportion (32%) have found it to be less affordable, and a noteworthy percentage (23%) are encountering difficulties in securing it. Additionally, respondents also emphasize how the surge in interest rates is impacting their capacity to manage their existing business debts (16%).
National comparison: A recent survey of small-business owners from Goldman Sachs 10,000 Small Businesses Voices found 77% reporting they are concerned about their ability to access capital. The investment bank called it a “stunning shift” from one year ago when 77% of respondents said they were confident in their ability to access capital. Of respondents who have applied for a small business loan in the past three months (17%), 61% have found it difficult to access affordable capital. Sixty percent said rising interest rates are impacting their ability to service existing debt. Local businesses that already operate on small margins are experiencing high material costs, fluctuations in gas prices, and a tight labor market (leading to higher wages) combine to raise cost structures and hurt cash flow. Meanwhile, since many small business loans are adjustable-rate loans, businesses are finding the cost of existing debt to be growing.
Finally, we inquired about the specific types of business support that respondents are seeking. The most prominent response (18.7%) indicated a desire for increased opportunities to engage in collaborations or establish connections with fellow local businesses. The supplementary categories are visually represented in the chart below.
Notably, many of these highly desired opportunities are presently being orchestrated by InUnison, making them easily available to local businesses. With the ongoing pressures stemming from economic and environmental challenges, the role of organizations like InUnison becomes increasingly vital, as they step in to offer the crucial resources that are in high demand.
InUnison remains steadfast in its commitment to being the primary resource for local businesses, ensuring that the right resources are provided precisely when they are most needed.