Access to Finance in MT Part 2: Survey of Businesses
This research explores the challenges small businesses face in securing funding, especially for underserved groups like Native American, rural, and women-owned businesses. With insights from 406 businesses, the study highlights financing trends, barriers, and solutions to improve access to capital and support Montana's economic growth.
Key Takeaway:
Access to Finance Challenges:
- 49% of respondents identified access to finance as their biggest hurdle.
- Other challenges include marketing and growth (43%), staffing (30%), and location costs (22%).
Primary Funding Sources:
- 75% of businesses rely on personal savings to start, with 42% using personal credit cards.
- Only 14% received investments, and 5% or fewer accessed grants.
Diverse Representation:
- 58% of respondents were women business owners, and 23% were Native-American owned businesses.
- Urban businesses made up of 53% of respondents, while rural businesses accounted for 47%.
Financing Disparities:
- Native American and women-owned businesses reported lower access to loans and investments compared to others.
- Larger businesses were more likely to use diverse financial services, like business loans and credit cards, than smaller businesses.
Economic Impact:
- Small businesses are the backbone of Montana's economy with over 128,000 contributing to employment and economic growth.
Recommendations
Expand Access to Training and Resources:
- Increase awareness of financing options and offer training for business planning, loan applications, and financial literacy.
Address Liquidity Issues:
- Support community-based lenders facing capital shortages through public-private partnerships and shared services.
- Develop centralized resources for small business financing opportunities and streamline state and federal program applications.
Enhance Inclusion:
- Target underserved groups, like rural, Native American, and women-owned businesses with tailored programs and incentives.
Scale Successful Programs:
- Expand effective initiatives like Montana's SSBCI funding program and public-private co-funding models.
Executive Summary
The "Access to Finance in Montana Part 2: Survey of Business" explores the challenges and opportunities in small business financing across the state. With insights from 405 businesses, the report highlights disparities in financial access for Native American, rural, and women-owned businesses. Personal savings remain the dominant funding source, but businesses report significant barriers in accessing loans, grants, and investments. Recommendations focus on increasing awareness, improving lender capacity, and fostering partnerships to bridge gaps. By addressing these issues, Montana can empower its small businesses, drive economic growth, and create a more inclusive financial ecosystem.
Read the full report: Access to Finance in Montana Part 2 Survey of Businesses