New NFIB Survey: Small Business Owners Concerned with High Interest Rates

Date: December 27, 2023

Latest NFIB survey shows financing concerns, holiday sales volumes

WASHINGTON, D.C. (Dec. 27, 2023)NFIB’s Research Center released the third credit-focused survey in a series first started in April 2023 assessing small business owners’ banking and financing activities. In addition, this survey assesses this year’s holiday sales and small business owners’ evaluation of economic conditions locally and nationally. The survey was conducted by email from December 1-13, 2023.

“More small business owners report that higher interest rates are impacting business operations,” said Holly Wade, Executive Director of NFIB’s Research Center. “Even with financing concerns, small business owners have expectations for a solid holiday season but aren’t confident in their local or national economy going into the New Year.”


Twenty-six percent of small business owners borrowed or tried to borrow money for business purposes in the last three months. Of those borrowing, 8% of owners were very satisfied with the amount and terms offered for the financing received, a significant decline from July 2023 when 32% reported being very satisfied.

Financing Concerns:

Eighty percent of small business owners accessing credit in the last three months reported high interest rates as their largest financing complaint, a significant increase from July 2023 (58%).

Five percent reported the amount of credit approved being too low as their largest complaint, and another 4% reported the collateral requirement was too big. Four percent reported the repayment schedule was too short and 4% reported too much paperwork. Another 4% reported that the application, approval, or closing process was too slow.

Twenty-one percent of owners reported that their major financing complaint was having a significant impact on their business. Thirty-five percent reported a moderate impact and 44% reported a mild impact.

Holiday Sales:

About one in five small business owners report that they generally experience higher sales volumes during the holidays.

When asked about their sales volumes during this past Black Friday, Small Business Saturday, and Cyber Monday, 17% reported strong sales volume, 35% reported moderate, and 29% reported weak.

When asked about their holiday sales volume expectations over the next month, about a quarter (26%) anticipate strong holiday sales volume, 55% have moderate expectations, and 20% have weak expectations.

Experience Accessing Financing:

Fifty-five percent of owners accessing credit in the last three months reported that interest rates were a significant issue. Thirty percent reported that it was a moderate issue, and 11% a mild issue. Interest rates were not an issue for 4% of small business owners, a significant decline from 23% in July 2023.

The amount of approved credit was not an issue for 58% of small business owners.

Ten percent of owners reported that the repayment schedule was a significant issue. Sixty-two percent reported that the repayment schedule was not an issue. Seven percent reported that the paperwork requirements associated with accessing financing were a significant issue. The application, approval, or closing process was not an issue for 64% of owners.

Reasons to Seek Financing:

Twenty-nine percent of small business owners reported the main purpose was to expand their business, 26% reported to meet operating and inventory expenses, 24% reported to replace capital assets or make repairs, and 8% reported other. Refinancing or paying down debt was the main financing purpose for 7% of owners.

Type of Financing:

Among those small business owners who borrowed, over half (56%) received a term loan. Twenty-eight percent received a line of credit, and 1% reported factoring. Fifteen percent reported none of the above.

Among those who did not apply for financing in the last three months, 64% reported that the primary reason they did not was because they did not need financing, a stark difference from July 2023 when 80% reported this. Fifteen percent reported that credit costs were too high and 2% did not think their application would be approved.

Financial State of Business and Economy:

About 16% evaluated the current financial state of their business as excellent. Forty percent reported good and 35% reported okay. Only 8% reported the current financial state of their business as poor.

When asked about the current state of their local economy, only 2% reported excellent, 21% reported good, and 55% reported okay. Twenty-two percent reported poor.

When asked about the current state of the national economy, 67% reported poor, up nine points from July. Zero percent reported excellent, 5% reported good, and 28% reported okay.

As for when the U.S. economy will enter the next recession, a little over half (58%) of small business owners think the U.S. is already in a recession. Fifteen percent think the next recession will start in the January to March 2024 period. Twelve percent believe a recession will occur in the April to June 2024 period, 7% reported the July to December 2024 period, and 9% reported January 2025 or later.

Beneficial Ownership Requirements:

The vast majority (83%) of small business owners are not at all familiar with the new federal regulation. Sixteen percent are somewhat familiar, and only 2% are very familiar.

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