The nation's 30 million small businesses account for nearly half of America's economic activity. These generate two-thirds of net new jobs and are a major driver of business diversity, innovation and overall competitiveness.
Small businesses as a whole are the foundation of healthy, vibrant communities across the country.
However, most small business owners are increasingly worried about the future. The combination of stubbornly high inflation, soaring market interest rates, challenges in recruiting and retaining employees, and the possibility of a looming recession is taking its toll.
The National Federation of Independent Business reports that its Small Business Optimism Index is trending down significantly. It has been evident for nearly two years that the index has been measuring below its 49-year average of 98.
A recent update to the 2023 American Credit Union National Voter Poll confirms these widespread concerns and reveals significant challenges and confusion.
For example, research shows that only 45% of business households say their income covers the cost of necessities such as gas, food, and housing.
Behavioral signs of financial hardship in business-owning households are also easy to spot. Compared to all households, business households are much more likely to use alternative financial service providers to meet their financial obligations. These include rental companies, payday loan providers, pawn shops, car title companies, and more.
“Economic disruption can be disruptive and challenging, but it also presents an important opportunity for credit unions to meaningfully engage with business owners.”
They are also more likely to identify as financially unhealthy.
The challenge is clear. However, the survey results clearly reveal that member business households evaluate credit unions much more favorably than non-member households evaluate commercial banks and other providers. I am. This is true for almost every performance metric we evaluate.
The difference we found is due to credit unions' more consultative approach, more business-friendly pricing, thoughtful products and services, and the overall sense of trust that financial cooperatives foster in business households. It seems there are.
For example, respondents from business households who are credit union members are 1.4 times more likely to report receiving personal financial education/counseling at their financial institution compared to business owners who are not members. Masu. The responses show that credit union members are acting on the advice they receive at their credit union and establishing financial buffers to protect themselves during difficult times.
Business-headed households without a credit union are twice as likely as households with members to say they have not established a financial buffer of at least $500 for unexpected expenses.
Not surprisingly, member business households are 1.3 times more likely than non-members to say very positively that their financial institution's financial health has improved.
The poll results detail similar differences across most of the other 11 dimensions related to financial health, including trust, service delivery, and community focus.
Next: Promise to members
1 Comment
7qr44k