SAN MATEO, Calif., April 24, 2018 /PRNewswire/ -- Of those who applied, 70% of small business owners without a business checking account were turned down for a business loan in the past two years, according to Nav.com's Annual Business Banking Study. The survey also revealed that entrepreneurs with no business checking account were nearly twice as likely to consider closing their business.
"The dynamics of small business lending have changed and not having a business bank account can be a recipe for disaster," said Nav's Education Director, Gerri Detweiler. "Cash flow data is a primary way many lenders evaluate a business's health. If you don't have that data to provide, or if your cash flow is weak, it can be nearly impossible to get many types of loans."
It's a boom or bust story for business owners: 26% without a business checking account had considered closing their business in the past two years, almost double the 14% who have a business checking account. Of those that considered closing, cash flow issues was the top reason provided (60%), followed by access to capital (50%).
Nav's survey, which polled 648 small business owners from across the nation, also uncovered these key findings:
Convenience drives where business owners bank: 47% said they chose their business bank account because it was at the same bank as their personal bank accounts. 46% cited location as a reason for choosing their business bank. These reasons easily beat out cost (17%) and perks (13%).
Business owners are engaged with their bank account: 60% said they check their business bank account at least once per day. 93% check their account at least once a week.
Business owners prefer large banks: 57% said they have their business bank account at a large bank. This compares to 18% at community banks, 15% at credit unions, and 6% at online banks.
Managing finances is a top pain point: When asked, "What's the hardest part of running your business that you didn't expect?" the top answer (24%) was "managing finances."
Nav helps business owners get more funding, lower their costs and save time so they can create the business of their dreams. It gives free access to business credit scores, cash-flow analysis, tools to help build business credit, and identity theft protection. Nav's marketplace offers more than 100 financing products and uses a lender-neutral algorithm to help business owners find the best financing options for their needs before they apply. The company has offices in Silicon Valley and Salt Lake City. For more information visit: nav.com.