Inflation Effects Hitting Small Businesses
Almost half of small business owners are taking out loans to help with increasing costs
December 20, 2021
Although optimism among small business owners is higher now than at the beginning of the coronavirus pandemic, many are now struggling due to the effects of inflation, Fortune reports.
The latest Small Business Index, which was released last week, found more than seven out of 10 small business owners say the rising costs of goods and services significantly impacted their operations in the past year.
“Inflation has really become the new dominant issue for small businesses,” said Neil Bradley, chief policy officer for the U.S. Chamber of Commerce, adding that inflation has eclipsed even COVID-19 concerns.
Among the 750 small-business operators surveyed in the Small Business Index report:
- 63% say they have increased their prices
- 40% say they have decreased staff
- 45% have taken out a loan over the past year.
Bradley says a loan rate of 45% shows a real concern among many small businesses. Adding in pressures from the worker shortage crisis and the supply chain crisis brings new challenges at a time when many small businesses are probably still in the recovery phase.
“Small-business owners are now dealing with different headwinds,” Bradley said. “For the first part of the pandemic, it really was shutdowns, fear of COVID-19, and the economic disruption that the pandemic induced. Now the headwinds that they are facing are inflation, a worker shortage crisis, and supply chain disruptions.”
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