Proximity matters. Most of the small businesses are, by definition, local. This means that the human element of doing business is front and center. Trust is built or broken (what we call “consumer confidence”) as, day to day, the consumer gathers and assimilates information. Perhaps more influential than this is the element of relationship.

“Now I am going to read you a list of institutions in American society. Please tell me how much confidence you, yourself, have in each one — a great deal, quite a lot, some or very little?”

Ok, close your eyes. Pretend you didn’t just see the exhibit at the top of this blog. How would you answer?

That was the question asked by Gallup in a poll that has been taken for over forty years. The choices were “a great deal”, “quite a lot”, “some”, “very little”, ‘none” and “no opinion”. (The “net positive” score was calculated by subtracting the sum of the “very little” and “none” scores from the sum of the “great deal” and “quite a lot” scores.)

The scores above were published in an article by Gallup in 2018. The results are probably not surprising to you. In fact, they probably stir something in you that you already know to be true.

What may or may not be surprising to you are the answers collected in 2019. 

The net positive score for big business decreased by over 100% to -11. Banks? Cut in half: +4. Small business confidence remained about the same with a score of +60.

Proximity Matters

Confidence is defined as “the feeling or belief that one can rely on someone or something; firm trust.” The fact is, trust increases as distance decreases. We know how this works in relationships. 

When talking about a good friend we refer to them as “close”. Or in some cases “all up in my bidness” As we come closer to someone, we see them more clearly and vice versa. The nearness of a trusted friend in a face to face interaction points to the level of knowledge and understanding they have about us.

The same principle is at work in the Gallup poll above.  Proximity matters. Most of the small businesses are local. The human element of interacting with small business owners is front and center. 

Trust is built or broken (what we call “consumer confidence”) as, day to day, the consumer gathers and assimilates information. Perhaps more influential than this is the element of relationship.

Let’s take a look at the banking institution as an example of the power of relationship. Global banks have higher default rates than local ones. This is partly because local banks have long-term relationships with their customers. 

The trend in the Gallup score above tracks with the long history of big banks swallowing-up the smaller ones. In 1979 their “net positive” score was 50.


Small businesses represent over 99% of the businesses in America. Almost 90 percent of these have fewer than 20 employees[i]. Yet, there is a tendency to be enamored by global brands. But even though many times it is the big corporations that dominate our attention, it is the world of small, local businesses that makes up our collective livelihood.  

All of this should come as no surprise. Just think about the prefix “com” in commerce. Associated with the Latin for commit, it simply means “together” or “in association”. 

When you are in community, you share a collective existence. Communities rise and fall together.

Local Lifeblood  

Independent businesses clearly make an economic impact and buying local plays a big part in that. But there are ways we can fuel small business success that go beyond purchasing goods and services.  

According to a survey last year of over 10,000 businesses that applied for a loan, 82% were denied financing by their bank for these loan programs.[iii]  It is not difficult to see how this puts them at a big disadvantage compared to larger companies. A study that was published and updated last December stated that:

“…large businesses and mega companies have been in a position to access loans and credit from various financial institutions and this advantage has considerably boosted their growth and development in the competitive business environments that threaten the existence of small businesses.

…the rate of business growth is directly proportional to the rate of investment. Thus, small business have a low rate of investment due to limited access to loans, which hampers growth and development, unlike large businesses that have unlimited access to loans.

Small and medium-sized businesses form the heart of our local economies. These local shops have our trust and affection, but they need our capital for business development. And while the financial cards may have been stacked against them for the past century, things have started to change over the past few years. There are now ways for locals to participate in financing small businesses.

Local businesses and local foods are some of the pillars of a strong economy. If financing is the lifeblood of those businesses, it makes sense that one of the best places to access this funding would be from those living within close proximity, or as we like to call it, their vicinity. 

These residents already share a tax base, common infrastructure and connections. Giving residents direct access as investors to local businesses will only increase local pride and resilience.

To learn more about how to fund your neighbor and invest where you live, subscribe here.

[i]Small businesses are an anchor of the US economy.

[ii] Local Communities Infographic: Small Business Charitable Giving – Big Impact on Local Communities

[iii]Why Getting a Small Business Loan is Difficult