Small Businesses Turn to Financial Products to Stay Afloat Amid Economic Challenges, but Resilience Remains Key

In 2023, the number of applications for access to capital increased compared to 2022 across various loan types such as lines of credit, business loans, personal loans, home equity loans, real estate loans, and cash advances. Despite this increase in applications, a third of small businesses in the area are still applying for these financial products as they are using them to cover expenses and make it to the next year where they hope to see improvement.

On the other hand, the U.S. Small Business Administration experienced a significant drop in loan applications with a decrease of 30% in 2022 compared to 11% in 2023. The top three financial challenges reported by business owners include rising costs of goods, services, and labor, weak sales, and high operating expenses. Operational challenges cited by owners were difficulty in hiring qualified employees, stagnating sales growth, and supply chain issues.

Despite facing these challenges, there is a sense of resilience among small business owners. While they are still struggling