MCLEAN, Va. — Capital One Small Business Banking released the results of its first-quarter 2010 Small Business Barometer, a quarterly survey of small businesses’ current financial condition and business projections for the next six months. Almost 80% of those surveyed believe that economic conditions are either improving or holding steady. In addition, 39% report that their company’s financial situation is better than it was last year — up 11% from last quarter — while 38% say their finances remained stable.
The survey indicates that many small-business owners are experiencing gradual financial improvements, with 69% saying they plan to expand their business by increasing turnover, sales and numbers of customers, and 33% planning to expand their premises, add new sites or move into new markets. More than half of the respondents plan to maintain their current level of spending on business development and investments, but 62% say they have no plans to hire new employees over the next six months.
“While financial conditions are not back to where they were pre-recession, our survey results show that there is some positive momentum and reveal that small-business owners across the nation believe things are beginning to turn around,” says Robert M. Kottler, executive vice president of small-business banking at Capital One. “The resurgence of small businesses within the U.S. will be a gradual process, but with growing access to capital and steady improvement in financial conditions, it’s clear the industry is trending in the right direction.”
The survey also reveals that bank financing is still the primary funding source for the growth of most small businesses, with 70% saying they are able to access the credit or financing they need. Half of the respondents say they intend to finance growth through these lenders, while one-third expect to do so through personal savings and 9% plan to use financing from outside partners.