A new Goldman Sachs 10,000 Small Businesses Voices survey finds that America’s small business owners are struggling to access capital needed to operate and grow their businesses, as interest rates rise and banks continue to tighten lending standards.

Of the small business owners who have applied for a new business loan over the past year (28%), 70% reported it was difficult to access capital. In contrast, 61% of loan applicants in the April 2023 survey said it was difficult to access capital in the prior three months. Seventy-six percent say difficulty accessing affordable capital has negatively affected their business and 73% say rising interest rates are having a negative impact on their business.

The survey also found that 84% of the small businesses surveyed are concerned about the Federal Reserve’s Basel III Endgame proposal having a negative effect on their ability to access capital. In July 2023, the Federal Reserve proposed the rule that will require large banks to further increase the amount of capital they hold. According to a news release, policymakers, industry organizations and banks have publicly stated that higher capital requirements will lead to reduced lending and credit access for households and consumers.

Other key data points from the survey include:

  • 68% of small business owners have outstanding business loans or lines of credit. Of these, 58% have a fixed interest rate, while 42% have a variable interest rate.
  • 63% of those with outstanding loans or lines of credit say rising interest rates have affected their ability to service their existing debt obligations.
  • 68% of those with outstanding loans or lines of credit say they would not be able to maintain current operations or grow their business without their business loan or line of credit.

This data is based on a survey of 1,556 Goldman Sachs 10,000 Small Businesses participants conducted from Aug. 29 to Sept. 7.