Financing Main Street: The State of Business Financing In America

2019 CCMC Survey: Financing Main Street (Cover Image)
Tuesday, April 2, 2019 - 9:30am

After a challenging decade that included a financial meltdown, recession, and a historically slow recovery, American businesses are reporting that their ability to access capital is steadily improving, and generally they are optimistic about their expected performance over the next 12 months. This improvement is a welcome development, given the difficulties Main Street businesses had raising capital in the years immediately following the financial crisis. 

In order to promote sustainable economic growth, our financial system must be as vibrant and diverse as the businesses it serves: A small business with one location may require the services of a local community bank that understands the neighborhood, while a large multinational company relies on the expertise of a global bank. In additional to traditional bank lending, the U.S. capital markets play a critical role in providing debt and equity financing to American businesses. 

A key component of a strong financial system is a regulatory structure that promotes economic growth. Unfortunately, the post- 2008 financial crisis regulatory response imposed enormous costs on the economy while doing little to fundamentally reform the U.S. financial regulatory system. As a result, Main Street businesses found it more difficult to access the capital they needed to innovate, grow, and hire new employees. 

While businesses report steady improvements in capital access, they view a few specific regulations on the financial system as continuing to present a barrier to growth. Businesses are also more concerned about the future performance of the overall economy than they are about their own performance. 

The U.S. Chamber of Commerce surveyed more than 300 corporate finance professionals about their core financial services needs and the direct or indirect impact that financial regulation has had on their ability to access short- and long-term capital. We asked them about products they use, services they rely on, and the number of financial institutions they typically use for various transactions. We also asked them how they see their company as well as the broader economy performing over the next 12 months. 

This report and survey are intended to help policymakers better understand the ongoing impacts that financial regulation has on the broader economy and to inform regulatory reform efforts that are currently underway.