Smallest Businesses Struggle to Access Capital and Businesses with Higher Revenues Show Marginally Improved Position
The nation’s small businesses continue to see only marginal improvements in their ability to access capital, with more than two thirds of businesses facing problems raising debt and equity financing. The results are part of the most recent Private Capital Access (PCA) Index report, a private capital markets data survey produced quarterly by Pepperdine University’s Graziadio School of Business and Management, in partnership with Dun & Bradstreet Credibility Corp.
The study does however, show a slight improvement in capital market conditions since the end of Q1, a period when U.S. small business owners experienced a reduction in hiring and a decrease in demand for capital according to the first PCA study of 2013.
“The Q2 Private Capital Access Index report provides encouraging news since access to capital continues to improve,” said Jeff Stibel, Chairman and CEO, Dun & Bradstreet Credibility Corp. “Ultimately, we want to see a faster recovery, since these companies represent the foundation of America’s businesses. Their recovery and stability is paramount to wider economic improvement.”
“This study indicates small businesses are gaining a little ground,” said Dr. John Paglia, director of the Pepperdine Private Capital Markets Project and associate professor of finance at Pepperdine University’s Graziadio School of Business and Management. “We still see the smallest businesses struggling to access capital the most, an indication their recovery is tepid at best. These companies need easier access to lending streams.”
The smallest of businesses, often referred to as micro businesses, still have the hardest time accessing capital, especially those with revenues less than $500,000. A joint Pepperdine/Dun & Bradstreet Credibility PCA Index report released earlier in Q2 indicated 63 percent of these companies said poor financing conditions continue to restrict their overall growth. The earlier study also found that the smallest of businesses are increasingly relying on their personal savings and investments, with 44 percent of respondents saying they transferred personal assets to finance business ventures.
The most recent study questioned roughly 2,000 businesses nationally. The larger companies surveyed – those with revenues between $5 and $100 million – indicated more confidence in their ability to secure financing of nearly every type, especially when compared with companies whose revenues total less than $5 million annually.
About the Pepperdine Private Capital Markets Project
The Pepperdine Private Capital Markets Project seeks to understand the true cost of private capital and the investment expectations of private business owners; providing lenders, investors and the businesses that depend on them with critical data to make optimal investment and financing decisions. The Project’s small business owner surveys draw their sample from a database of businesses maintained by the Dun & Bradstreet Credibility Corp., research partners for the Pepperdine PCA Index Quarterly Reports.
Learn More: http://bschool.pepperdine.edu/privatecapital
About Dun & Bradstreet Credibility Corp.
Dun & Bradstreet Credibility Corp. is the leading provider of credit building and credibility solutions for businesses. The company helps businesses establish their credit with a D&B D-U-N-S(R) Number and provides the only business credit solution available to companies looking to build, monitor, and impact their business credit and credibility. The company’s headquarters are in Los Angeles, CA with offices throughout the United States.
Learn More: http://www.DandB.com
About Pepperdine University Graziadio School of Business and Management
Founded on the core values of integrity, stewardship, courage, and compassion, Pepperdine University’s Graziadio (GRAT-ZEE-ah-DEE-oh) School of Business and Management has been developing values-centered leaders and advancing responsible business practice since 1969. Student-focused, experience-driven, and globally-oriented, the Graziadio School offers fully accredited MBA, Masters of Science, and bachelor’s completion business programs.
Learn More: http://bschool.pepperdine.edu/newsroom/
SOURCE: Pepperdine University Graziadio School of Business and Management