SMB Capital Access Hits Post-Recession High

The rates at which small businesses are requesting and accepting capital have steadily increased, hitting the highest levels since 2012, according to the quarterly results of the latest Dun & Bradstreet and Pepperdine Private Capital Access (PCA) Index. The Q2 2015 Index report, derived from 3,693 completed responses, was released on Monday (June 22).

Among businesses with less than $5 million in revenue, the demand for capital increased 9.1 percent since Q1 2015, representing the highest rate since Q4 2012. The results showed a similar pattern for the businesses’ access to capital, which jumped by 7.9 percent since the survey began in 2012, and 1 percent since Q1 2015.

“The results are the highest growth in access to capital for businesses that we have seen since launching our Index,” Jeff Stibel, vice chairman of Dun & Bradstreet, said. “Small businesses are accessing capital at a rate that we haven’t seen since before the recession began. Their optimism and demand is a promising sign that economic recovery is in full swing.”

The results stand as yet another positive indicator for the sector. In April, a 7 percent year-over-year increase in small business borrowing was reported by the Thomson Reuters/PayNet Small Business Lending Index, a sign of steadily improving business conditions.

Over the last year, 48 percent of small businesses reported an increase in revenue, and 72 percent anticipate higher revenues over the next 12 months, according to the PCA index. These results may solidify the growing optimism that the upward trend is here to stay.

“The increase in demand for capital by small businesses is very encouraging,” Pepperdine Private Capital Markets Project Director Dr. Craig R. Everett said. “We are hopeful that this increased demand will translate into business expansion in the sector.”

The PCA Index report also presented some other notable trends that small businesses reported for Q2 2015, including:

• 34 percent of small businesses plan to generate financing in the next six months
• 38 percent of small businesses transferred personal assets to the business over the last three months
• Fewer companies surveyed are seeking capital to refinance existing loans

To check out what else is HOT in the world of payments, click here.