Small business owners struggle to get bank loans

FAYETTEVILLE, Ark. (KNWA/KFTA) – Small business owners who turn to nonprofits, business development centers and crowdfunding are lucky to get the financial support they need, but those who request loans from their banks are not.

Small businesses are still struggling with the effects of the pandemic as prices for supplies soar.

Laura Carrasco moved to Springdale from Mexico at the age of 19 with her family and the dream of owning a business like they did back home. In 2018, she and her sister opened their restaurant, Bites & Bowls, with only a small loan from their parents and their garage fridge. Soon they realized they needed a bit bigger loan to get things done, but after asking a few banks they were unlucky.

Carrasco said she sometimes felt hopeless when her business faced financial difficulties, but finding the right resources is what made her feel like she still had a chance.

Mary Beth Brooks of the Arkansas Small Business and Technology Development Center said this is a common trend among small businesses in the region. She said companies often didn’t have enough collateral or their credit score dropped during the pandemic.

Brooks said the pandemic has not stopped hurting businesses, especially restaurants, and while their revenues have returned to where they were, she said the cost of everything else has gone up.

“Their cost of goods has gone up dramatically,” Brooks said. “The combination of the shipping issues and all the other issues and then the labor costs also went up dramatically.”

After Carrasco contacted a business development organization that helped her secure a smaller loan, she sees her business continuing to grow, which is so important to her and her family.

“So that’s my main income, and it’s important because we built it ourselves,” Carrasco said.

Brooks said resources like the Arkansas Small Business and Technology Development Center can help small business owners who are still struggling. Resources such as Startup Junkie and Kiva Northwest Arkansas Hub.

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