Most small company owners fear that their businesses will have to close because of the situation of the economy.
According to the May Small Business IQ Poll by the Job Creators Network Foundation (JCNF), 64% of small business owners expressed anxiety that their operations could have to be shut down due to the state of the economy. The pace of inflation and the turmoil in the banking industry are two of the top worries among small company owners.
“While the inflation crisis has mostly faded from the news, small company owners’ anxiety over rising costs has reached a two-year high. The U.S. small business community is unhappy now that financial instability and the threat it poses to getting financing have been added,” foundation president Elaine Parker stated in a statement.
Parker praised the American Small Business Prosperity Plan of the Job Creators Network, which asks for a number of measures, such as making the tax cuts of former President Trump permanent and reducing government expenditure, to “supercharge Main Street.”
“A decent starting step would be to pass the Prove It Act. Senator Joni Ernst’s measure, which was introduced in May, will assist in reducing the federal regulatory load that chokes our nation’s small company job creators,” according to Parker.
The study, which was conducted between May 5 and 30, involved 400 small company employers nationwide. Online invites that were dispersed at random drew responses. The poll’s margin of error has a 95% confidence level and is 4.9%.
After reaching 57% in February, worries regarding the economy have intensified over the previous several months. The peak for the previous year, at 65%, occurred in November and December.
Small company owners expressed “very” or “somewhat” anxiety about rising interest rates and how it would affect their ability to obtain loans, according to 66% of them. The new banking laws also caused “very” or “somewhat” anxiety among 71% of small company owners.
Investors were alarmed about the security and stability of their own accounts after the bankruptcies of Signature Bank, Silicon Valley Bank, and First Republic Bank earlier this year sent a tremor through smaller banks.
The recent spate of bank collapses is the worst period since the 2008 Great Recession. When the assets of the 25 banks that collapsed in 2008 are taken into account, the assets of those three banks, which total $532 billion, are worth more.
Along with the bank failures, inflation is still running over the Federal Reserve’s target rate of 2%. According to information issued by the Bureau of Labor Statistics this week, the annualized inflation rate increased by 4% in May.
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