Small businesses are expecting to see significant growth in the next year, after reporting revenue increases at the end of 2017.
Some 58% of small businesses reported a profitable quarter, up from 52% last year, the 2017 Private Capital Access Index report revealed.
The report – collated by Dun & Bradstreet and Pepperdine Graziadio Business School – found businesses are anticipating an average increase in revenue of 9.1 %.
Around 84% of SMEs also claimed they expected to perform better in 2018, while 90% said they expected to see their company grow.
SMEs are experiencing better access to bank loans
Respondents claimed they were seeing a rising success in securing financing from banks, with success rates for bank loans increasing by 8% YoY (to 37%), and business credit cards increasing by 14% (to 65%).
The most popular reason for securing bank loans was to refinance existing loans. But employment could lead to another reason to seek loans or investment, with 69% divulging plans to hire in the next six months. However, a small 5% of respondents pointed to government regulations and taxes as hindering them from expanding their team.
Doctor Craig R Everett, director at the Pepperdine Private Capital Markets Project, said: “While it is hard to say exactly why small and mid-sized businesses expressed less concern about taxes and regulatory policies, it is all but certain they are paying more in taxes as business improves. Media attention on the US tax reform measure before Congress could be neutralising taxes and regulations as a concern.”
SMEs are unprepared for unforeseen disasters
Despite a number of natural disasters in recent months, only 44% of businesses said they had emergency plans in place if an unforeseen disaster occurred. Over half admitted they would depend on outside funding if the scenario arose – indicating a lack of forward-planning regarding SME strategy.
Bodhi Ganguli, lead economist at Dun & Bradstreet, said: “Given the current state of the US economy, it’s not surprising that small businesses are ending the year on a financially positive note in comparison to a year ago.
“However, there are still many economic and politically related variables that are largely unknown at this time in how small businesses will be affected in the upcoming year. This quarter’s report is telling a cautiously optimistic story from the small businesses perspective.”
The report analysed responses from 1341 small and medium-sized businesses across the USA.
