SMEs Ignoring Federal, Local Help, Says Fifth Third

The vast majority of small businesses in the U.S. aren’t taking full advantage of resources and services provided by national and local governments, a new report from Fifth Third Bank has found.

The bank, which released the report late last week ahead of National Small Business Week (which began May 1), revealed that 81 percent of the more than 500 SMEs surveyed said they have not worked with existing community resources, like their local chamber of commerce.

Instead, small business owners turn to their peers for help. Other small business owners were cited by 28 percent of respondents as their top destination when in need of advice, followed by family (25 percent), friends (18 percent) and the Internet (11 percent).

SMEs are even more likely to go to their lawyer for advice before their banks, with less than 6 percent citing their banker, community assistance provider, local chamber of commerce or the Small Business Administration (SBA) as their first source of help.

Just 7 percent reported applying for an SBA loan.

“It’s no secret that small businesses are the backbone of the economy, but as any entrepreneur can attest, starting or growing that business is no easy task,” stated Fifth Third Senior Vice President and Head of Business Banking Kala Gibson. “As we join the rest of the nation in celebrating Small Business Week, we strongly encourage small business owners to explore all the available products and resources that will help your business grow.”

Gibson also pointed to the high number of SMEs that said they would turn to personal means — like personal credit cards, personal savings or retirement funds — to support their business.

“It’s OK to have a portion of your personal wealth in your business, but you shouldn’t drain your savings or create excess debt to fund daily business operations,” he stated. “By working closely with your banker and community assistance providers, like SCORE, small business owners can improve their cash flow and turn personal capital into working capital.”