By the Numbers: Small Business Funding (and Invoice Factoring)

By the Numbers: Small Business Funding (and Invoice Factoring)

small business funding numbersEconomy is on the rise, but for small businesses and startups two facts remain unchanged:

  •      Business credit, while improving, remains very tight.
  •      Business owners continue to seek alternative sources for their funding needs.

To give you a feel for the big picture regarding lending, credit, and sources of funding, MP Star Financial has pulled together a by-the-numbers compilation of data culled from a variety of public sources.

Sections include Small Businesses and Borrowing, Banks, Other Funding Sources, and Invoice Factoring. A short introductory comment is followed by the relevant information.

Where appropriate, the dates or time periods reflected in the data are noted. All information provided represents the most recent available.

Small Businesses and Borrowing

High levels of small business debt remain. But growing companies appear to be stretching their resources, and remain an engine of economic activity, growth, and employment.

28.8 Million: The number of small businesses (<500 employees) in the US in 2016. (Source: US Small Business Administration.)

50%: Percentage of small businesses admitting to have cash flow problems in the past year. (Source: Discover Small Business Watch)

$1.2 Trillion: Total small business borrowing in 2015. (Source: US Small Business Administration, Dept. of Advocacy)

$5,000 – $25,000: Average startup capital needed secured by new businesses in the US. (Source: US Small Business Administration)

3%: Percentage of US startups securing more than $1 million in startup capital. (Source: US Census Bureau, Survey of Business Owners)

22%: Percentage of small business-eligible purchases that actually were awarded to small businesses in 2011. (Source: US Small Business Administration, Dept. of Advocacy)

66%: Percentage of net new US jobs created by small businesses after 1970. (Source: US Small Business Administration)

Banks

Big bank approvals are up by more than 50% over just a year ago, but have yet to rebound to pre-recession levels.

Technical advances put in place to speed up and streamline application processes appear to be helping. A tip: Make sure you have your act together before you approach a bank.

$598 Billion:  Total small loans to businesses by 2015 . (Source: Federal Deposit Insurance Corp)

16.8%: Percentage of loan applications approved by big banks (assets of $10 billion or more) to small businesses in April, 2013. (Source: Biz2Credit.com)

10.6%: Percentage of loan applications approved by big banks (assets of $10 billion or more) to small businesses in April, 2012. (Source: Biz2Credit.com)

1: Rank of Bank of America, among all US big banks, in rejecting small business loan applications. (Source: Forbes.com)

Other Small Business Funding Sources

Small business loan approvals are virtually unchanged from a year ago. Still, chances for a “yes” from alternative lenders are far better than at big banks.

61.1%: Percentage of small business applications approved by alternative funding sources (invoice factors, merchant card financiers, micro lenders, etc.) in April, 2015. (Source: US Small Business Administration)

63.0%: Percentage of small business applications approved by alternative funding sources  (invoice factors, merchant card financiers, micro lenders, etc.) in April, 2012. (Source: Biz2Credit.com)

$460 Billion: Total small business finance company loans in 2010. (Source: US Small Business Administration, Dept. of Advocacy)

$100 Billion: Total other sources of small business loans in 2010. (Source: US Small Business Administration, Dept. of Advocacy)

48%: Percentage of projects successfully meeting their fundraising goals on Kickstarter.com, the world’s largest crowd-sourcing platform. (Source: Kickstarter.com)

$5,000: Average amount of funding raised by a project on Kickstarter.com. (Source: Kickstarter.com)

$71: Average pledge to a Kickstarter.com offering. (Source: Kickstarter.com)

13: Number of defined project categories on Kickstarter.com.(Source: Kickstarter.com)

Invoice Factoring

Invoice factoring – or receivables factoring – remains a cost-effective, flexible funding option for firms in numerous industries.

1995: The year MP Star Financial entered the invoice factoring business. (Source: MP Star Financial)

3: Number of pages in MP Star Financial’s factoring application. (Source: MP Star Financial)

1: Number of times you must complete the application. (Source: MP Star Financial)

2: Average number of days to approval after an invoice is submitted to MP Star Financial for funding. (Source: MP Star Financial)

$0: Factoring application fee at MP Star Financial. (Source: MP Star Financial)

800-833-3765: Number to call to discuss your business funding challenges, and possible use of factoring, with an MP Star Financial professional.

Photo courtesy John Domonkos

MP Star Financial provides invoice factoring, purchase order financing and other alternative and asset-based lending services. 

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