Christmas Season Can Bring Surprises for Small Business


If you own a small business, there’s a decent chance some of the surprises coming your way this Christmas won’t be courtesy of a fat guy in a red suit, as new data from National Funding reveals.

The data is made up of responses from a survey of 506 small business owners from across America who were contacted at one of two points in October. It shows 4.3% of small businesses expect to borrow money at some point during the shopping season.

National Funding CEO Dave Gilbert believes that number is low. “The truth is 4.3% is probably under-reported because the majority of loans that arise during the holiday season are last minute. Whether or not a small business believes they will need to borrow money, owners should always be planning ahead and anticipate the need for financing.”

Should that need for additional funding arise, 63% of small business owners do not expect to get it from a bank.

That is good news for alternative lenders, Mr. Gilbert believes. Those lenders provide products better suited to small businesses at this time of year anyway. “These days, they have more alternative lending options,” Mr. Gilbert said. “Most times, small to medium size businesses don’t need long term financing, especially during the holiday season. Alternative lending options offer the flexibility and quick turnaround needed for owners to keep their businesses running smoothly.”

Many small businesses generate a large share of their revenue in the fourth quarter. That planning Mr. Gilbert refers to should take place earlier in the year when businesses have some time to consider if they want to make an investment in additional equipment, staff, advertising or product that could pay off in a few months.

There is plenty at stake for both the businesses and lenders. The more than 28 million small businesses in the United States expect to generate just under $1 trillion in sales.

A surprising number of those retailers will not be making any sales online, a practice which will cost them sales. More than half of the respondents said they are not using the internet for sales or service. “Despite the popularity of ‘online-only’ or an online component, many mom-and-pop shops prefer the in-store interaction with their customers,” Mr. Gilbert explained.

Those retailers prefer person-to-person dealings at the counter, and that preference extends to dealing with lenders. While most borrowers will at least research potential lending partners online, the majority prefer to seal the deal in person. That belief has factored into National Funding’s staffing philosophy. “At National Funding, we have a dedicated sales team that personalizes the customer experience, so they are comfortable, fully informed and equipped to make the best decisions for their business,” Mr. Gilbert said.

One final nugget shows the domestic economy is recovering nicely from the recession. A strong majority of 88 percent of respondents have a neutral to positive outlook this season.

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