The United States economy has become less friendly toward new businesses in recent years, a new report found. According to a study conducted by the Brookings Institution, which examined the rate of new company creation and destruction since 1978, the U.S. has become less entrepreneurial since the late 1970s.
The report showed that since 1978, new business creation – measured as a portion of all businesses founded within the prior 12 months – fell by nearly 50 percent by 2011. Due to tightened credit standards for lending, many small businesses have been unable to gain access to the business capital they need to stay open over time, making it increasingly difficult to stay in operation.
This fall in the rate of new and established businesses alike does not bode well for years to come, the report stated. According to the authors of the report, “it implies a continuation of slow growth for the indefinite future.”
Certain states were worse off than others in terms of entrepreneurship. California, for example, had a -50 percent change in the share of all firms less than 12 months old since 1978, while Alaska experienced a 61 percent drop and New York experienced the smallest drop – 18 percent – over the same time period.
Although getting a business off the ground is challenging enough, keeping operations afloat is becoming more trying than ever. As banks continue to make it difficult to gain access to funding and overall consumer spending and economic forecasts remain unstable, many business owners are finding it harder to keep their doors open. These individuals can contact National Funding to find out more about their financial options. Whether an individual would like to explore their equipment leasing options or to gain more understanding as to how they can secure a financial future for themselves, the professionals at National Funding can be of assistance.