Trends

 

05 22 2015

Small Business Optimism Building

05 22 2015

Optimism Builds As Small Businesses Plan Hiring, Expansion

Small business owners across the country may be on the hunt for new business financing, as a recent survey showed firms and their owners are increasingly optimistic about the state of small business affairs in 2015.

The Business Confidence Survey released by solutions firm Insperity found 61 percent expect sales to grow in 2015, compared to 49 percent who said the same in October. As businesses make more money and benefit from the stronger U.S. economic climate, they may do well to look into small business working capital to use for expansion or other operational and cash flow needs.

More plans to hire

Small businesses are the engine of job growth, and after a 2014 that saw monthly job gains top 200,000 on average, more firms are pursuing staff additions and new top talent. Half of responding small business owners said they plan to hire, versus 31 percent in October. Just 3 percent of respondents said they plan layoffs, which is down from 5 percent in October.

Hiring was a particular point of emphasis, as owners ranked finding the right employees as their top short-term concern (47 percent said so, the same number that answered the economy was their concern). The top long-term worries for small business owners were government’s effect on their business growing larger (50 percent) and possible tax increases (45 percent).

Despite these challenges to consider in the near- and long-term, respondents were unequivocal in their optimism that 2015 would be a better year for business. Eighty-seven percent believe they will meet or surpass their 2014 performance, up from 72 percent in October. While 13 percent still expect to do worse, it’s well down from the 28 percent that answered similarly in October.

“The positive economic view for 2015 that business owners suggested in our October Business Confidence Survey was solidly confirmed in their January survey responses,” said Paul J. Sarvadi, Insperity chairman and chief executive officer. “By instituting plans to add employees, increase compensation levels and improve sales, they are acting on that optimism.”

Where will the money to compete come from?

One constant truth of business expansion in times of economic prosperity (whether it is equipment procurement or hiring more staff) is that it costs money to do anything. While some businesses may have their own stockpiles, obtaining a business loan or some kind of financing is usually the most common option for owners. Only, the question becomes: Where to get the money?

Increasingly, that money is not coming from traditional and well-known banks. In a study on lending to small business conducted by the Federal Reserve Bank of Cleveland, researchers found lending has increased in volume with the economic recovery, but stringent credit qualifications have consistently locked small business borrowers out of the lending picture.

According to its study, the level of small business loans is 17 percent below a peak achieved before the recession. While such loans have grown 3.4 percent in the past year, researchers said “this modest improvement does not provide strong assurances about the health of lending in [the small business] space.”

When small business owners are crunched to find available funding, they need only leave the line at the bank and talk to an alternative lender like National Funding. Options like merchant cash advance and loans with little paperwork and 24-hour turnaround can be an owner’s greatest resource in an increasingly intensive and dead-end lending situation.

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Any applications submitted electronically shall have the same force and effect as if the application bore an inked original signature(s). The above information, together with any accompanying financial statements, schedules, or other materials, is submitted for the purpose of obtaining credit and is warranted to be true, correct, and complete.

 

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To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person and business that seeks a business loan.  What this means for you: When you apply for a loan, we will ask for your business name, address, and Tax Identification Number.  We will also ask for your name, address, date of birth, and other information that will allow us to identify you.  We may also ask to see your driver’s license or other identifying documents.

 

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