An overwhelming majority of small to medium business owners in the U.S. self-finance their own businesses, and a majority of those SMB owners have struggled with cash flow gaps.
That is the result of Bluevine’s new survey of 692 small and medium business (SMB) owners in various industries throughout the U.S. The study found that 83 percent of SMB owners have bootstrapped their companies and built them using their own personal finances, and only 15 percent of SMB owners have used a loan to fill cash flow gaps. In contrast, 60 percent used personal funds to fill cash flow gaps, 48 percent went without pay, and 17 percent delayed major expenses such as payroll or rent.
“It’s clear that cash flow challenges continue to be a significant growth and operational hurdle for the vast majority of business owners,” said Eyal Lifshitz, founder and CEO of Bluevine. “The findings of this survey indicate that small business owners in America are in need of accessible, external funding options, and continue to be self-sustaining and reliant, largely out of necessity.”
Some of the key findings from the survey include:
The vast majority of SMBs are self-funded.
Applying for a loan seems to be an afterthought for most SMB owners.
SMB owners most often meet cash flow gaps with personal finances.
The majority of SMB owners manage finances alone.
Taxes and technology investments are the sneakiest expenses for SMBs.
Legislation has a large impact on SMBs.
Bluevine is dedicated to giving small business control over their finances, and conducted this study to understand how small business owners finance their business and what challenges they face. Currently, Bluevine’s solution gives small businesses control over their finances by providing rapid and simple advances on outstanding invoices. As evidenced by the study, lumpy cash flow and long payment cycles often put a strain on small businesses’ working capital. Bluevine gives small businesses access to the funds they need to purchase inventory, cover expenses or expand operations. Bluevine’s quick, simple, online solution lets small businesses get paid on day one for invoices due in 15-90 days.