Small business owners struggle to get bank loans

FAYETTEVILLE, Ark. (KNWA / KFTA) – Small business owners who are turning to non-profits, business development centers and crowdfunding are having luck getting the financial support they need, but those asking for loans at their banks are not.

Small businesses are still struggling from the effects of the pandemic, as prices of supplies are skyrocketing.

Laura Carrasco moved to Springdale from Mexico at age 19 with her family and the dream of owning a business as they did back home. In 2018, she and her sister opened their restaurant, Bites & Bowls, with only a small loan from their parents and the fridge from their garage. Soon they realized they needed a bit bigger of a loan to get things going, but after asking a few banks they had no luck.

Carrasco said at times she felt hopeless when her business was facing financial struggles, but finding the right resources is what made her feel like she still had a chance.

Mary Beth Brooks at the Arkansas Small Business and Technology Development Center said this is a common trend with small businesses in the area. She said often times the businesses don’t have enough collateral or their credit score dropped during the pandemic.

Brooks said the pandemic has not stopped hurting businesses, especially restaurants, and even if their revenue is back to where it was, she said the cost of everything else has risen.

“Their cost of goods have increased dramatically,” Brooks said. “The combination of shipping problems and every other issue, and then payroll costs have increased dramatically as well.”

After Carrasco reached out to a business development organization that helped her a smaller loan, she’s seeing her business continue to grow, which is so important to her and her family.

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

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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