A new study shows that small business confidence is on the rise. Barlow Research finds that small business confidence is making companies more optimistic and more willing to apply for additional credit. Barlow Research finds increased business confidence among small businesses ($100K-<$10MM) in the second quarter of 2014. Small business optimism appears to be growing faster than the middle market, which had been the market leaders. Barlow Research’s Second Quarter 2014 Economic Pulse Survey explores business confidence, credit appetite and the importance of various products, services and channels when selecting a new financial institution.
Small Business Confidence
Expectations for the overall condition of business, condition of industry, sales and profits have improved. However, middle market expectations in these metrics saw slight decreases. Furthermore, both small business and middle market companies expect to increase their investments in capital expenditures over the next 12 months.
“Even as middle market companies become more tentative and appear ready to relinquish their position as economy drivers, bankers need to be ready to capitalize on opportunities from increased small business confidence,” says Joel Mueller, Research Analyst, Barlow Research.
Demand for additional credit increased from the previous quarter among both small businesses and middle market companies. The percentage of small businesses that were approved of all/partial credit increased while denials/expected denials decreased.
“Small business firms are warming to the idea of adding additional credit over the next 12 months but have yet to commit to a major credit increase,” says Bernie Kuechler, Director of Data Analytics, Barlow Research.
Other important results from the second quarter 2014 Economic Pulse report:
- Small business expectations to apply for additional credit surpassed the middle market.
- The percentage of small businesses and middle market companies that intended to divest ownership in the next five years decreased.
- If small businesses were to switch primary banks, business checking account features and fees would be the most important product offering and having a conveniently located branch would be the most important channel.
About Barlow Research Associates, Inc.
Barlow Research Associates, Inc., founded in 1980, provides research and consulting services to the banking industry in the U.S. and overseas with specialties in custom research, strategic consulting and syndicated research programs for small business, middle market and business Internet banking.
For more information on the study visit www.barlowresearch.com