Small Business Insights from Our Engagement with QuickBooks

Capital allocation is the lifeblood for small businesses. There’s a reason why the proverb is “cash is king”.

Cash and the access to it is even more important for small businesses because they are more likely to suffer negative impacts due to extended NET repayments. Which is why lenders, like Quickbooks, are trying to improve small business lending.

Here are some insights concerning small businesses and lending:

• 77% of small businesses who apply for a loan with a bank are rejected.

• Online lenders provide a higher probability of approval compared to large banks; 75% approval from online lenders compared to large banks at 56%.

• Entrepreneurs finance the start of their business by:

  • 64.4% use personal and family savings

  • 16.5% use business loans from banks or other financial institutions

  • 9.1% use personal credit cards

  • 8.7% use personal family assets (other than the owner's savings)

• If a business owner has a credit score of under 700 there is a high probability that their business will not receive a bank loan.

• The small business lending process at most banks is very manual and uses a varying array of non-integrated systems which results in an inefficient, inconsistent, and expensive small business lending process.