With signs pointing toward a slowly improving economy, some small business owners may be increasing capital spending over the coming years. According to a recent Wells Fargo and Gallup poll, 26 percent of entrepreneurs say they anticipate an increase in spending, up from 20 percent at the end of 2012. Many of these small business owners will need outside funding to carry out these initiatives, such as a merchant cash advance for business or other financial options as spending becomes a priority.
The results of the survey show a consistent upward trend in spending, which is positive for the economy and the state of small business. Gallup reported that from 2003 to 2008, small business owners were more likely to respond they were going to increase spending. From 2008 on, those numbers dropped, reflecting the hardships of small business owners.
Struggling business owners
However, those struggles are far from over for some owners – 28 percent of respondents said they plan on decreasing spending on investments such as computers, machinery, facilities or other equipment. This number is down from 34 percent at the end of 2012, but still, outweighs those who intend to improve spending habits.
The report also focused on the spending habits of entrepreneurs over the last year. Results showed 25 percent of company owners increased spending during the past 12 months, while 31 percent said they decreased business spending during the same time period.
The decline in small business spending has been far from steady over the past several years – in mid-2009, the number of small business owners cutting spending hit its peak, with 51 percent of respondents saying they expected to reduce investments. Since 2009, this number has dropped and risen again – in 2011, 45 percent of respondents said they planned on cutting spending; later that year, 39 percent said the same, but by the end of 2011, 43 percent again reported they would be cutting spending. As spending dips and rises, entrepreneurs have had a tough time gaining stable footing.
The difficulties with these statistics lay in the future practices of small businesses. Companies that can afford to spend more capital on equipment and other long-term investments will likely gain an advantage over their less financially secure counterparts. Those who struggle with financing may soon find themselves falling behind competitors over the coming years. Meanwhile, getting a small business loan remains difficult for most as banks continue to impose tight restrictions on lending, leaving many entrepreneurs stuck between wanting to expand and stay competitive and not being able to do so.
Individuals who want to expand business but do not have the means to do so can come to National Funding for assistance. National Funding provides cash advances to help company owners make ends meet, as well as equipment financing to allow entrepreneurs to improve business practices and stay ahead of the competition.