These South Carolina companies have fewer than 500 employees, with at least one who is not the owner. Only 8% said they sought the kind of equity investment described above.
Here, too, there’s a mix-and-match process. Pretty much everyone sought funds from a large or small bank. And 65% applied to credit unions, online fintech companies, finance companies and CDFIs, or Community Development Financial Institutions.
Interestingly, more than half of companies that needed funds said they didn’t apply. Even in the throes of the pandemic, they remained averse to debt, felt it would cost too much, or were discouraged about their chances of being approved.
Apparently, that last bit of pessimism wasn’t completely unwarranted. Only a third of companies received all the funding they asked for, while 39% didn’t get any of it.
Best Banking Bets
If you’re thinking of going the fintech route, know that only 32% of respondents found happiness with online banks. Why so bad? You’re likely to end up paying for that faster, simpler application process with high interest rates and unfavorable repayment terms.
Where will you find the least headaches? Probably a small bank if you’re like the 76% of entrepreneurs nationally who were happy with their experience, according to the Fed. That’s compared with a 62% happiness rate for those who dealt with big banks.