For the 33.2 million small business owners in America, a good night’s rest may be hard to come by.
Many entrepreneurs struggle with cash flow, but today’s higher prices and interest rates can make keeping the business on track, not to mention securing a business loan, pretty challenging. Those worries hit hard at night, with 85% of small business owners saying they are losing sleep over financing, according to a recent survey of owners conducted for SoFi.
“Almost every day there is a constant worry about funding,” said Amy Wampler, CEO at Spartan Mechanical in Bedford, Indiana. “I find it hard to sleep at night because of the issue of managing cash flow. It is so stressful that, during off-seasons, I might not have enough money to cover all our bills.”
America says it loves small business. When asked about their views on U.S. institutions, an overwhelming portion of Americans (86%) have positive views of small businesses, according to the findings of a 2024 PEW Research Center study.
But what the admirers may fail to realize is this is not always an easy path for the owners, especially in recent years. In our survey, 25% of the entrepreneurs say they are dissatisfied with the current financial situation of their small business.
When Small Business Owners Are Searching for Loans: An Interesting Trend
“To put it frankly, small businesses have to do the same things corporations do to stay afloat, but with a fraction of the budget and team,” said Brooke Webber, head of marketing and executive team member at Ninja Patches. “This dilemma is part of what keeps me up at night.”
Our analysis of small-business-owners’ nocturnal stress began with data spotted on Google Trends. We looked at searches for “small business loans” and were struck with the fact that it peaked in the middle of the night. Not only did we see that middle-of-the-night anxiety hits hard, we discovered precisely when it hits hardest.
Based on data gathered from Google Trends for more than 120 days between October 2023 and April 2024, the average peak search interest for “small business loan” was at 4:50 AM Central Time.
This surprising revelation led us to dig deeper into the question: Why are small business owners searching for small business loan information in the wee hours of the morning?
Small Business Owner Concerns
According to the Small Business Administration (SBA) Office of Advocacy, a small business is an independent business having fewer than 500 employees. Over the last ten years, those small businesses have employed an average of 46% of the country’s workforce.
But the stakes are high. The Bureau of Labor Statistics says that approximately 20% of new businesses fail within the first two years of operation.
For our research on small business challenges, we heard from 1,000 adults (18+) in the U.S. who were owners or partners of a business employing 50 people or less.
In the survey, the respondents said these issues keep them up at night (more than one response was possible):
• 41%: Cash flow management
• 40%: Competition in the market
• 38%: Marketing and customer acquisition
• 21%: Employee-related concerns
• 17%: Regulatory compliance*
But more than anything else, it seems that financing questions make people turn on their computers or smartphones at night. Half of small business owners said they search online for information about small business loans at least monthly, according to our survey. And 30% said they search online for this info at least weekly.
* We rounded percentages to the nearest whole number, so some data sets may not add up exactly to 100%.
Concerns for Funding and Capital
New small business owners often need to borrow money to buy equipment and supplies, pay employees, and otherwise finance their operations. In our survey, about three out of four small business owners said they have some level of concern about securing funding for their business, and 18% said they are “very concerned.”
When we asked which was the primary worry about small business funding they dealt with, the answers broke down this way:
• 38%: Insufficient capital for growth
• 30%: High interest rates
• 15%: Fear of rejection
• 11%: Complex loan application process
“As a bootstrapped business, I frequently worry about funding, especially during critical phases of development,” said Axel Lavergne, Founder of Review Flowz. “The most troubling aspect is ensuring we have sufficient cash flow to cover operational expenses, development costs, and marketing efforts without external financial backing.”
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Sourcing and Applying for Loans
In our survey, 40% of small business owners said they’ve applied for a small business loan.
For some of them, getting a loan was a game changer.
“It was quite the journey—wading through the sea of paperwork and convincing the powers-that-be of our growth potential,” said Eugene Klimaszewski, Founder of Mammoth Security Inc.“ “But in the end, it paid off. We were able to funnel those funds into state-of-the-art security systems, giving our services a serious upgrade.”
For those who said they had difficulty seeking financing, the obstacles ranged from the entrepreneurs saying the lenders didn’t understand their business to the complexity of the loan process. One respondent said, “I applied for an SBA loan, and the process was so cumbersome that I again opted to personally fund.”
Here’s how the challenges break down when we asked respondents what problems they faced during the loan application process (responses given by the 40% who’ve applied for a loan and more than one choice was possible):
• 47%: revenue or asset amount requirements
• 40%: Credit score issues
• 40%: Lengthy approval times
• 39%: Documentation requirements
• 33%: Business maturity (length of time business has been in operation)
• 31%: Lack of transparency in terms and conditions
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Alternative Funding Options
Owners often find alternatives to small business loans to boost their company, whether it’s microloans, family help, or investors.
In our survey, one-third of small business owners (33%) said they have explored alternative funding options like crowdfunding or peer-to-peer lending. Of those, less than half (41%) have found a suitable option. And another one-third (33%) haven’t explored alternative options, but said that they plan to.
When Businesses Suffer
A lack of funding has caused some business owners to cancel or delay certain business initiatives, according to our survey.
When asked which initiatives they had to put a stop to or push back because of lack of funding, the owners said:
• 39%: Business expansion
• 39% Purchasing assets
• 36% Marketing
• 28% Hiring employees
• 18% Research and development
• 13% Acquisitions or partnerships
• 13% Meeting compliance standards
“The real crunch is making sure we’ve got the funds to stay ahead and make waves in the
fast-paced gaming world, said Marin Christian-Ovidiu, CEO of Online Games. “The price tag for creating and releasing a new game is hefty, and any hiccup in financing can throw off our schedules and put us behind in the race.”
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The Takeaway
After seeing that on Google Trends the average peak search interest for “small business loan” was at 4:50 AM Central Time, we surveyed 1,000 small business owners and found that 85% say they are losing sleep over worries about financing.
In the survey on small business challenges, when asked which was the primary worry about small business funding they dealt with, the answers broke down this way: Insufficient capital for growth (38%), high interest rates: (30%), fear of rejection (15%), and complex loan application process (11%).
If you’re seeking financing for your small business, SoFi can help. On SoFi’s marketplace, you can shop top providers today to access the capital you need. Find a personalized business financing option today in minutes.
If you’re seeking financing for your business, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your business in minutes.
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