Borrowing Costs Rise for SMBs, Particularly Women and Black-Owned Businesses



C2FO, a global platform for working capital, released a new worldwide survey examining the working capital health of more than 6,700 leaders of small and mid-sized businesses (SMBs).

Key findings from the survey include the following:

  • Respondents cited economic instability and uncertainty about customer orders as their biggest challenges — concerns likely fueled by the COVID-19 pandemic and the 2020 economic crisis.
  • An average of 87% of respondents said they have enough liquidity for the next six months.
  • Liquidity costs continue to rise, as 65% of respondents said they pay an APR of more than 8%.
  • Late or extended payment from customers is a growing global concern, as 37% of respondents said late payments from customers increased in 2020.
  • Due to the pandemic, the cost of borrowing in the last year increased for 32% of respondents within the United States — most significantly impacting women-owned businesses, with 43% noting an increase, while 24% of men-owned businesses noted an increase. In addition, 34% of Black-owned businesses said they experienced an increase in the cost of borrowing.
  • Despite the challenges of 2020, overall optimism among respondents about their future business prospects was fairly strong, averaging 6.5 on a scale of one to 10.

“While it’s heartening that many SMBs in this survey have a positive outlook for their immediate future, it is also very clear that more needs to be done to provide these businesses with immediate access to the low-cost liquidity they need to grow,” Alexander “Sandy” Kemper, founder and CEO of C2FO, said. “These kinds of studies are important in calling out the economic challenges that businesses worldwide face every day.”

The survey was conducted across 16 countries in December 2020 and January 2021, focusing entirely on businesses with between 10 and 500 employees. In the survey, 49% of responses came from non-white owned businesses, with 27% of responses coming from Black-owned businesses. In addition, 46% of responses came from women-owned businesses.

As noted above, the cost of borrowing in the last year increased for 32% of respondents within the United States — most significantly impacting women-owned businesses, with 43% noting an increase, while 24% of men-owned businesses noted an increase. In addition, 34% of Black-owned businesses said they experienced an increase in the cost of borrowing. The trend for women-owned businesses was further reflected when looking at small businesses with revenue of under $50 million, with 39% of women-owned businesses within this category expressing an increase, while only 23% of men-owned businesses with a revenue of under $50 million said their cost of borrowing increased.


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