Small business owners are still skittish about hiring new employees even as some indicated they have access to the credit and financing needed to keep their firms running.
A recent survey of 1,915 for-profit small businesses by Capital One Small Business Banking revealed that 62% do not have plans to hire new talent over the next six months, while 70% said they are able to access the credit or financing they need. More than half, or 60%, planned to maintain their current level of spending on business development and investments. The survey was conducted in the first quarter of this year.
"While financial conditions are not back to where they were pre-recession, our survey results show that there is some positive momentum and reveal that small business owners across the nation believe things are beginning to turn around," said Robert Kottler, executive vice president of small business banking at Capital One.
Nearly 80% of the small business owners said they believed economic conditions have either improved or held steady, with 39% saying their company's financial situation is better than it was last year?an increase of 11 percentage points over fourth quarter results?and 38% saying it has been stable over the past 12 months.
While many small business owners nationwide are experiencing gradual financial improvements, they continue to be mindful of their plans for future growth, the data showed. Sixty-nine percent of those surveyed said they are looking to grow their business by increasing turnover, sales and number of customers. And 33% would like to expand their premises, add new sites or move into new markets. When looking ahead to potential challenges over the next six months, almost half (48%) of small business owners said their biggest challenge will be obtaining new customers, while 30% said it will be maintaining existing customers.
According to Capital One, bank financing is still the primary funding source among the small businesses surveyed. Half intend to finance their growth through commercial banks and lenders, one-third (33%) intend to use personal savings and 9% intend to use financing from outside partners.
"The resurgence of small businesses within the U.S. will be a gradual process, but with growing access to capital and steady improvement in financial conditions, it's clear the industry is trending in the right direction," Kottler said.
Capital One's Small Business Barometer is a quarterly survey that gauges the current financial condition and business projections for the next six months of small business across the nation.?