By: Julie Story
The financial landscape is changing for small businesses, many of whom employ a large majority of the nation's workforce. Between the down economy, new healthcare regulations and financial regulations that are impacting credit access, a new survey found that many small businesses are worried about their ability to survive past 2013.�
The latest Wells Fargo and Gallup quarterly survey measured small business concerns over the coming year. Healthcare costs and taxes on small businesses were listed as the top two concerns among owners at 54 and 53 percent, respectively. However, another 25 percent of business owners cited limited access to credit as a core problem, and specified that this scenario is "hurting business a lot." Another 22 percent said it was "hurting it a little" and only 2 percent of companies said credit access was actually helping them. These fears are fueling many companies' hiring decisions and may carry long-term implications for the nation's recovery. For example, 30 percent of companies said they are no longer hiring more workers because they fear they won't be in business in the next 12 months. This is up from 24 percent who gave the same response in January 2012.�
Extending access to credit
Separate studies reveal that community bank and credit unions are at the forefront of those who are extending small business banking products. This trend - and the reputation for developing personal relationships with business clients - may help continue to drive new business toward local institutions. Larger banks have remained largely reticent to extend credit lines and loans due to uncertainties over financial regulations. While these fears have also plagued many smaller financial institutions, maintaining flexible credit terms and continuing to promote small business programs may help local banks and credit unions gain a larger market share and absorb some of the customers that have turned their backs on national institutions.�
Further, offering more business products may also help financial institutions move toward relationship banking and cross-sell both personal and business products and services. Studies show that a number of clients with significant assets prefer to work with a single institution where they can monitor their money in a more streamlined, and simplified manner. Many owners who may be concerned about surviving the economy may benefit from more flexible terms, affordable interest rates and value products that local institutions are able to provide.�