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Survey: Small, mid-sized companies in a capital crunch
More small and medium-sized businesses are having challenges with working capital, or the money they have available for funding their day-to-day operations, according to a survey by Dun & Bradstreet and Pepperdine University’s Graziadio School of Business and Management.
Sixty-six percent of the companies surveyed from late April to early May said their working capital needs were the reason they sought financing during the second quarter. That was up from 54 percent a year earlier.
Nearly three-quarters of women-owned businesses and 80 percent of minority-owned businesses reported they were struggling with working capital; that was the main reason they sought financing.
Many smaller businesses are short of working capital because their customers, including bigger corporations, are taking longer to pay for goods and services.
“As the Federal Reserve continues to raise the interest rate and the cost of borrowing increases, small businesses will likely feel this crunch more and more,” says Bodhi Ganguli, an economist at Dun & Bradstreet, which compiles credit and other information on companies.
The survey questioned more than 1,100 businesses.
