Read our full analysis for a more in-depth look at these trends.
Small Business Checkpoint
Despite tightening credit conditions, loan financing for small businesses has not shown a meaningful decline.
June 2023
Key takeaways
- Despite banks reporting tightening lending conditions, Bank of America internal data shows that the average amount of loan disbursement deposited into small business accounts has not shown material slowdown over the past year. Part of the reason could be that small businesses may be turning to alternative sources of funding such as fintech companies.
- Moreover, small businesses can also seek liquidity support through factoring, which is generally used to cover daily operational costs. Interestingly, account inflow from factoring has declined more noticeably according to Bank of America internal data, down by roughly 20% year-over-year (YoY) in May. This drop likely reflects easing cash flow pressure as inflation slows.
- Small business spending in May was roughly in line with a year ago. Total payments per small business client were up 1% YoY, according to Bank of America internal data. Payroll spending was up 3% YoY with small businesses in the lodging sector showing particular strength.
Small Business Checkpoint is a regular publication from Bank of America Institute. It aims to provide a real-time assessment of small business spending activities and financial well-being, leveraging the depth and breadth of Bank of America’s proprietary data. Such data is not intended to be reflective or indicative of, and should not be relied upon as, the results of operations, financial condition or performance of Bank of America.
