With access to credit absolutely essential for the nation's small businesses, a new survey is indicating that many small business owners are increasingly worried about increasingly higher financing costs. The survey, conducted by the Nashville-based National Federation of Independent Businesses, revealed that a strong 58% of small business respondents pointed to ongoing high interest as their number one concern in obtaining financing. A smaller 14% reported that the process of obtaining credit was too slow. Other complaints: too much paperwork, repayment schedules that are too short, and collateral requirements that are too large. "The health of the financial system is essential to small business operations," Holly Wade, executive director of the NFIB's Research Center, said in a statement. "While most owners are currently satisfied with their ability to borrow," Wade continued, "the escalating cost of financing associated with high interest rates is a significant issue for many." Roughly a third of small business owners responding to the survey said they had tried to obtain credit in order to meet inventory and operating expenses; while 26% said they needed new financing to either make repairs or replace capital assets. A smaller 20% said they tried to obtain new financing to expand their businesses. While reports of bank closures last year troubled a significant percentage of respondents in an earlier survey, overwhelmingly today the vast majority reported confidence in the stability of the banks they do business with. On a separate but related question, 52% of respondents said they think the U.S. is currently in a recession, with 17% saying they think the recession will hit later this year, and 20% pegging the January to June period of next year as the most likely time for a downturn. By Garry Boulard
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