Access to Capital High But Demand is Wavering - Dun & Bradstreet Survey - Q4 2015


Even though small- and medium-sized businesses have greater access to capital at any point since 2012, demand for the capital is actually down according to the latest results from Dun & Bradstreet and Pepperdine University’s Private Capital Access quarterly report as reported by CFO Magazine.

The survey was completed in November 2015 before the recent market selloff to start 2016.

Small businesses had access to more capital. Here are some key findings from the survey:

  • 5% increase in successful bank loan financing (35% financing success rate for Q4).

  • Increasing access from alternative business financing options: i.e., business credit cards (60% success rate); merchant cash advances (31% success rate); and business online marketplace lenders (26% success rate).

  • Small business demand for funding fell 5.2% from Q3 2015

“Mid-sized businesses, too, are seeing decreases in demand for capital (-3.8% change since Q3). This segment also had a decline in bank loan access in the fourth quarter (73% success rate, a 17% decrease from last quarter).”

Mid-size businesses struggled with demand more than their small counterparts for the first time in quite a while, which is concerning” for the overall economy, said Dr. Craig R. Everett, director of the Pepperdine Private Capital Markets Project, in a press release.

“Since a growing small business quickly becomes a medium-sized business, I consider medium-sized businesses the true bellwether of growth in our economy. With demand for capital taking a hit for these mid-sized businesses, the overall business growth outlook seems very soft. These businesses are saying that they are optimistic about growth, but they do not appear to be making actual plans to grow.”

Other key findings from the survey include:

  • “80% of small and midsize businesses expect 2016 to be better than the previous year, with 87% confident of growth in 2016.

  • 72% of small and midsize businesses expect to increase revenue in 2016 by an average of 10%.

  • 56% of small businesses believe the current economic environment is restricting their businesses’ growth opportunities compared with just 25% of midsize businesses.

  • 49% of small businesses indicated the current business environment is restricting their ability to hire, compared with 22% of midsize businesses.”

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#capital #smallbusiness #middlemarket

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