Despite a noted improvement in the nation’s economic stability, an annual survey by the Kauffman Foundation and LegalZoom finds that entrepreneurs running startups continue to lack access to credit.
The survey, titled “Challenges Facing New Entrepreneurs in 2014,” collected data from 1,242 companies recently incorporated through the online legal solution site LegalZoom, according to Kauffman.org. This lack of access to credit was cited by 45 percent of new companies as a business challenge, which has remained unchanged from the 2013 and 2012 surveys.
As the economy improves, however, other obstacles to new businesses have become less of a burden in the past two years. Respondents who said they were impacted by unpredictable business conditions declined 11 points from 57 percent in 2013, while the number of respondents who said they faced no business challenges rose 12 points from 37 percent in 2013, according to Kauffman.org.
Dane Strangler, vice president of Research and Policy at the Kauffman Foundation, said that news regarding the economy is generally positive.
Government policies and their effect on startups was also posed to the entrepreneurs surveyed. Nearly 41 percent said that no state-level policies hindered the growth of their business, but 30 percent cited taxes as an issue and 14 percent cited licensing regulations and fees. Thirty-one percent reported experiencing problems with operational/licensing challenges.
The results of the survey indicate a need for more research on the effects of occupational licensing and tax-complexity reform on entrepreneurship, according to Kauffman.org.
