Small Business Owners Hopeful About Access to Credit

By Karen Axelton

Small business owners are becoming more optimistic about the availability of credit, a new survey by Gallup shows. The Wells Fargo/Gallup Small Business Index poll conducted last month shows that small business owners’ perception of the ease of obtaining credit is the most positive it has been in three years.

The poll found a net difference of -7 percentage points between the 2 percent of small-business owners who say credit will be easy to get in the next 12 months and the 32 percent who say it will be difficult. Of course, that’s nowhere near the +45 of June 2007, before the recession began. The measure hasn’t been positive since a +14 reading in September 2008.

The poll also reflects a continuing trend, as the 32 percent who expect credit to be somewhat or very difficult to get in the next 12 months is down from 38 percent in January and 43 percent in November 2011.

That’s perception, but what about reality? Asked to look back over the past 12 months, 30 percent of small-business owners said that credit was somewhat or very difficult for their companies to get; 22 percent said it was somewhat or very easy to get. Thirty-four percent were either extremely or very confident they could get credit if needed; 39 percent were “somewhat” confident about this.

Small business owners are no strangers to borrowing: Three in four have previously borrowed money or used credit for their businesses. About half (47 percent) use just a little of the credit available to them, while 20 percent use most or all of it.

What does credit enable small business owners to do?

• 76 percent of owners say it has made it easier for them to run their businesses on a daily basis;
• 63 percent say it has helped them keep their businesses open;
• 50 percent say it has helped them expand their products and services, take more risks, and be more profitable;
• 33 percent say it helped their businesses with payroll; and
• 20 percent say it allowed them to hire.

Image by Flickr user Robert Scoble (Creative Commons)

This entry was posted on Tuesday, May 22nd, 2012 at 6:00 am and is filed under Capital Access, Raising Capital, Small Business, small business. You can follow any responses to this entry through the RSS 2.0 feed.


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