Capital One: Small Business Gain Modest Confidence

Some small business owners in the second quarter of 2011 are feeling better about the economy and expect a gradual but continued improvement, according to a survey released by Capital One Bank on Thursday.

"Our second quarter survey results suggest that many small businesses are seeing sustained improvement in business performance. This is a trend we've seen developing over the last few quarters and, while the pace has been modest, it has been generally consistent and that's definitely something we like to see," said Peter Appello, Executive Vice President of Small Business Banking at Capital One Bank.

Through a telephone poll of 1,904 small business owners, the survey found that roughly one-third plan to hire new employees within the next six months. But most (78 percent) of those who said they planned on hiring expected to hire between one to ten new employees. Only 11 percent expected to hire between ten to twenty new workers.

Forty-four percent of small businesses surveyed in the second quarter believed that conditions were improving for their business, an increase of 12 percentage points from businesses that felt that way that a year ago. Nine percent believed economic conditions were getting worse in the second quarter of 2011, compared to 23 percent who felt that way a year in the same quarter last year.

Forty-eight percent said their financial position is better than it was a year ago - up eleven percent from the percentage who said that a year ago. And while 64 percent plan to keep the same level of spending in the near future, 27 percent said they would increase spending on business development and expenses over the next six months.

Also, access to credit doesn’t appear to be holding back hiring for small businesses. While 85 percent of small businesses surveyed said they have access to the credit and financing they need, only 16 percent of respondents said they have attempted to gain financing in the past year. Just eight percent said that their hiring decision were affected by the availability of financing.

Appello said, "While there continues to be a level of caution as businesses think about expenditures, we are seeing a small but healthy uptick this quarter in the percentage of small businesses planning to hire and increase spending on business development and investments over the next six months. Although most of those businesses planning to hire will keep expansion modest, these results are encouraging for the second half of the year."


Source:
Capital One Bank