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Small Business Digest


Access to Capital Remains Key Challenge for U.S. Small Businesses

Small businesses continue to face major challenges in accessing the capital needed to grow, a major survey shows. Despite these challenges, small businesses are much more optimistic about the economic forecast than larger companies, and are more likely to hire in the coming months, the survey shows.

Those were key findings of the State of Small Business Report, a survey conducted by the Pepperdine Private Capital Markets Project in cooperation with Dun & Bradstreet Credibility Corp. Some 10,637 privately held businesses were surveyed. These are among the report’s findings:

  • Of those respondents that tried to raise capital within the previous 12 months, 35% applied for bank loans, and only 50% of those that applied were successful (whereas 16% of those trying to raise capital looked to friends and family, with a success rate of 79%);
  • While business owners have a negative outlook on general business conditions, small-business owners indicate that they are more likely to hire additional staff in the next six months;
  • Small-business owners cited access to capital among the top reasons preventing the owners from hiring new employees, 22% citing access to capital.

“We are proud to facilitate one of the largest surveys of small businesses ever conducted in the U.S. by offering the Pepperdine researchers access to the Dun & Bradstreet Credibility Corp.’s vast database of small businesses,” said Jeffrey Stibel, chairman and CEO, Dun & Bradstreet Credibility Corp. “These results make clear that small businesses are poised and ready to jumpstart this country’s economic engine, but are restrained by numerous obstacles accessing the capital that is so critical to growing these companies.”

Said Dr. John Paglia, who directs the Pepperdine Private Capital Markets Project: “The…State of Small Business Report gives capital providers and policy makers a unique look at how small businesses are faring. A comprehensive solution to our economic crisis must include input from small businesses as well as members of the private capital community.” Paglia is an associate professor of finance at Pepperdine’s Graziadio School of Business and Management.

Download Pepperdine’s State of Small Business Report at (free registration required).

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