Despite the emphasis on entrepreneurship as the backbone of the U.S. economy, the financial system still isn’t built to support small business owners. In fact, it’s getting harder. A July 2025 Goldman Sachs survey found that 81% of small business applicants are struggling to access affordable capital. Nearly half have delayed or canceled expansion plans because interest rates are too high or loan conditions are too tight.
This isn’t a new issue. But the post-COVID economic climate, rising rates, and tighter lending standards have made an already difficult landscape worse. Add to that inconsistent public policy, sluggish access to credit, and a market that still favors large enterprises and venture-backed startups, and you’ve got a perfect storm for stagnation.
The Root of the Problem Isn’t Risk.
Banks and financial institutions often cite “risk” as the reason small businesses struggle to secure funding. But that oversimplifies the issue. Most small business owners aren’t asking for venture-sized checks. They’re looking for modest, flexible capital to hire a few people, invest in equipment, or cover cash flow gaps. What they’re being offered are products built for someone else: short repayment terms, sky-high interest, or collateral demands that aren’t realistic.
According to the U.S. Chamber of Commerce, many banks continue to reduce their small business loan portfolios, preferring lower-risk investments. Alternative lenders, while faster, often charge exorbitant rates. And government programs, while helpful on paper, are often slow, complex, or misaligned with entrepreneurs’ real needs.
It’s not that capital doesn’t exist. It’s that it’s not being designed or deployed with the small business owner in mind.
What the Data Really Shows Us
Here’s the reality: these statistics aren’t just numbers; they’re a blueprint of a system fundamentally out of step with how real businesses operate. Entrepreneurs are navigating a maze built for someone else entirely.
- 81% of small businesses struggle to access affordable capital.
- 47% have delayed growth plans due to financing constraints.
- Nearly 1 in 3 say available funding options don’t match their repayment ability or operational structure.
- Bank lending to small businesses has declined steadily since 2020, despite consistently strong repayment trends and credit performance.
That’s not a “market condition,” that’s a structural mismatch. Underwriting models still value collateral over cash flow, stability over growth potential, and perfect documentation over practical reality. In Dan’s words: the system is playing a different game than entrepreneurs are, and then acting surprised when we don’t win.
So Why Do Entrepreneurs Keep Going?
Because they have to. That’s what entrepreneurs do.
According to the same Goldman Sachs survey, 75% remain optimistic, and 72% expect to grow in 2025 despite these capital constraints. That’s not naïveté, but necessity. Most small business owners didn’t start with a safety net. They’ve built resilience because they had no other choice.
But let’s be clear: grit isn’t a capital strategy. And hope won’t cover payroll.
This is the part of entrepreneurship most people don’t see. The bootstrapping. The late payments. The juggling of receivables to make rent. It’s unnecessarily hard. Because the financial tools that do exist often weren’t designed with small operators in mind. They were built to scale startups or de-risk enterprise lending, not fuel the day-to-day, solvable problems of real businesses.
What Needs to Change
We don’t need more platitudes about "supporting small businesses." We need:
- Better-designed loan products that align with cash-flow businesses, not just collateral-backed ones.
- Policy reforms that reward community banks and CDFIs for lending where it matters most.
- Streamlined public programs that prioritize access and usability, not bureaucracy.
- Private capital innovation that sees the massive opportunity on Main Street, not just Silicon Valley.
Access to capital shouldn’t feel like chasing venture capital you don’t want or trying to “prove yourself” to underwriters who’ve never run a business. It should be part of an ecosystem that understands volatility isn’t failure, it’s the cost of operating in the real world.
If you’re a small business owner struggling to raise capital, you’re not alone. The system isn’t broken—it was never really built with you in mind.
But that doesn’t mean we can’t rebuild it better. And as entrepreneurs, that’s what we do, we find the gap, we build the bridge, and we keep moving forward.
Sources
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