D&B survey reveals business borrowing flat

Recent research from business insight provider Dun & Bradstreet and Pepperdine University indicated that small business financing was flat through the first three quarters of 2012. The Pepperdine Private Capital Access Index (PCA) revealed those running businesses are still wary of obtaining financing.

Borrowing flat, loans difficult to obtain
The PCA showed that 32 percent of business owners had recently tried to acquire business funding, but many entrepreneurs claimed circumstances are holding them back from getting the loans they seek. Seventy-six percent of business owners reported thinking obtaining a loan was too difficult. Sixty-three percent claimed credit restrictions prevented them from expanding, a number which rose from 64 percent in the first quarter of 2012. Another 53 percent said credit restrictions limit their hiring, which could impact their businesses.

"The most recent PCA results suggest that businesses and lending institutions alike see clouds on the economic horizon, with responses trending in a way that points to general economic weakness," said finance professor Dr. John Paglia, director of the Pepperdine Private Capital Markets Project. "Our index data indicate that business owners are very cautious right now, and that their demand for financing, plans for growth and expected hiring are all down."

Low confidence could be due to fiscal cliff
One reason for low business confidence and and the small number of companies currently seeking loans could be the impending "fiscal cliff," a combination of tax increases and spending cuts scheduled to kick in automatically if the federal government can't reach a budget and deficit agreement by the end of the year. In fact, audit and advisory firm KPMG recently released a survey that revealed many business professionals don't expect lawmakers to come to an agreement before December 31.

According to the survey, 48 percent of respondents claimed they did not anticipate that the government would be able to develop a policy to stop the fiscal cliff. Thirty-two percent imagined it would be possible for lawmakers to reach an agreement, while 19 percent were unsure.

However, a significant amount of respondents also expected a temporary "stop gap" measure to be put in place. Seventy-seven percent imagine such a solution is possible to avoid devastating effects on the economy.

It remains to be seen whether an agreement can be made on this issue, and if so, how it will impact business confidence and the willingness of entrepreneurs to take out loans.

Content presented by Bridge Bank, offering flexible, customized solutions for entrepreneurs.

Getting Started

Find your ideal banker:

Featured Insights

Every time another high-profile company like Target falls victim to fraud, both consumers and businesses scramble to...

Investment volume registers above historical quarterly average ($3.8B) at $7.1 billion. The Silicon Valley continues...

The National Federation of Independent Business released its Small Business Optimism Index for July. Sentiment among...

Inc. magazine spoke to Morgen Newman, who...

Boudin Bakery is one of the oldest businesses in San Francisco, having started in 1849 as the originator of San...

Early indicators show entrepreneurship is growing in the U.S., according to USA Today. Banks are easing credit...

Employment - Men still lag behind women. Overall, men have 699,000 fewer jobs now than they did in December 2007,...

Companies that only do three or four international sales a month are often not aware of the various payment...

Recent News

09/03/14
San Jose, CA – September 3, 2014 – Bridge Capital Holdings (NASDAQ:BBNK), whose...
BusinessWire
07/28/14
NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (“KBRA”) has assigned senior...
07/24/14
San Jose, CA – July 24, 2014 – Bridge Capital Holdings (NASDAQ:BBNK), whose...
07/22/14
Conference Call and Webcast Scheduled for Tuesday, July 22, 2014 at 5:00 p.m....
San Jose Mercury News
06/26/14
The award is a donation from Bridge Bank and Heritage Bank. Mr. Science makes a...
06/09/14
San Jose, CA – June 9, 2014 – Bridge Capital Holdings (NASDAQ:BBNK), whose...
06/05/14
San Jose, CA – June 5, 2014 – Bridge Capital Holdings (NASDAQ:BBNK), whose...
06/03/14
San Jose, CA – June 3, 2014 – Bridge Capital Holdings (NASDAQ:BBNK), whose...
Orange County Business Journal, Jane Yu
05/28/14
San Jose-based Bridge Capital Holdings has pegged Costa Mesa as a key location for...

Twitter

Featured Insights

Featured Insight

Every time another high-profile company like Target falls victim to fraud, both consumers and businesses scramble to...

Featured Insight

Investment volume registers above historical quarterly average ($3.8B) at $7.1 billion. The Silicon Valley continues...

Featured Insight

Boudin Bakery is one of the oldest businesses in San Francisco, having started in 1849 as the originator of San...

Recent News

The National Federation of Independent Business released its Small Business Optimism Index for July. Sentiment among...

Twitter