The Small Business Funding Stats Every Entrepreneur Should KnowTyler Sousa
Welcome to 2018, where it’s starting to feel like the world has literally been flipped upside down (looking at you IHOb). In a time where the line between what’s true and what’s false continues to blur, there is one thing that we can look to for certainty: Statistics.
From entrepreneurs to the NBA, so much value is now being placed on collecting and analyzing data, and for good reason. The purpose of tracking and calculating results isn’t just because they’re fun to look at; it gives us a sense of what works and what doesn’t.
While nearly all entrepreneur growth can be attributed to some form of trial and error, without data to back it up, it’s mostly guesswork.
We all know what works for one business isn’t guaranteed to work for another, but seeing where your competitors have failed versus where they succeed can help you devise a better plan of action as you move forward.
Before we dive too far into using analytics to make the right decisions for your company, let’s take a look at some of the small business statistics given to us in a recent report by the Small Business Administration.
Business Funding Statistics & Facts That Might Shock You
Did you know 99% of all businesses in the U.S. are considered small? That’s right, not only is your local grocery store in the majority, you and all your fellow small business owners are the driving force in many of your economies.
Small businesses alone account for over 57 million jobs, nearly 50% of total private employment in the country; a number that includes retail juggernauts like Walmart and Amazon.
So, the first thing to take away from this report is that the impact these businesses have on our country’s economy is anything but small.
Entrepreneur growth doesn’t happen overnight. It requires years of hard work and planning.
The average annual income for individuals self-employed at their own incorporated business was around $50,000, which falls just short of the income of the average American citizen.
However, you can’t put a price on cutting your own check and doing something you are passionate about, which is why the number of small businesses (nearly 30 million) in the United States continues to grow.
How to Use Small Business Funding Statistics to WIN
With over 73% of small businesses using small business funding over the last year according to the SBA, it’s no secret that companies could always use some extra capital to help them move forward.
We’ve dug up some business funding statistics aimed towards helping you figure out not just where to get this extra cash, but how other owners just like you are getting their loans, how much they’re borrowing and how often they’re approved.
The goal of these stats is to help your business succeed in these situations. Just as defenders know when All-Star Paul George dribbles to his left he’s going to pull up for a jump shot 36% of the time, business owners can take into account that when applying for an SBA loan, only 33% of new companies don’t receive approval while 67% of existing ones do.
SBA loans are one of the most popular funding options for small companies, and the Small Business Administration is a great resource not just for funding but for business funding statistics. According to a report from 2015, this list is a representative of different businesses’ chances of being approved for an SBA loan:
- Urban businesses – 83%
- Rural businesses – 17%
- Male-owned businesses – 71%
- Female-owned businesses – 29%
- White-owned businesses – 57%
- Minority-owned businesses – 29%
According to a different report by Biz2credit, the other two most popular funding options for entrepreneurs are bank loans and alternative lenders.
Bank loans approve fewer applicants than the SBA does at 23%. This number is not surprising considering how popular bank loans among entrepreneurs and the qualifications they require of their applicants.
Alternative cash flow lenders, on the other hand, boast an impressive approval rating of nearly 61%.
What An Entrepreneur Can Learn From These Business Funding Facts
We’ve thrown a lot of numbers at you here, and we know not all of them are going to stick. But if you were to take just one statistic away from this article, let it be that there is more than one way to fund your business.
While bank loans remain the most popular choice among small businesses, it’s clear that there is a smaller chance of being approved for traditional financing than with alternative lenders like Fast Capital 360.
Allow me to use one more sports analogy to help drive this point home.
If your company is the offense of the Philadelphia Eagles and being approved for business funding is scoring a touchdown, then consider an alternative lender like Fast Capital 360 your Philly Special – it’s the play you’re going with when you’re trying to become a champion.
When your business is in a pinch and needs cash fast, or you’re in need of a small business loan for bad credit, you sometimes can’t afford to be rejected.
We hope these business funding statistics help you make the most efficient decision for your company while shedding light on some of the fallacies that have become so common in today’s society.