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Small Business Loan Market Accelerates

Need a small business loan? You’re not alone. Small businesses are seeking and receiving growth capital — loans and other types of financial backing — at the highest rate since 2012, according to a survey from Dun & Bradstreet and the Pepperdine Private Capital Access (PCA) Index.

jeff stibel dunn bradstreetAmong the small business data points from April that are worth tracking:

  • Demand for capital by small businesses (those with less than $5 million in revenues) increased 9.1% in Q2 2015 vs. Q1 2015.
  • At the same time, access to capital by small businesses increased by 7.9% since the survey began in 2012, and 1% since Q1 2015.

Strong Praise

“The results are the highest growth in access to capital for businesses that we have seen since launching our Index,” said Jeff Stibel, vice chairman of Dun & Bradstreet, in a prepared statement. “Small businesses are accessing capital at a rate that we haven’t seen since before the recession began. Their optimism and demand is a promising sign that economic recovery is in full swing.”

There are additional signs of small business strengths:

  • 48% of small businesses in Q2 2015 reported an increase in revenue over the last 12 months, a 4% increase from three years ago.
  • 72% anticipate an increase in revenue over the next 12 months, a 10% increase from the 2012 report.
  • 34% of small businesses plan on raising financing before the close of 2015; up 2% from Q2 2012.
  • Fewer small businesses are demanding capital to refinance existing loans, with a 12.7% decrease since 2012.

Still, it’s unclear how frequently IT service providers are applying for loans and funding — especially since some channel partners have stopped building their own IT infrastructure and are instead plugging into third-party clouds.

That said, it’s clear that some IT service providers are still seeking loans and funding for office build-outs, staff expansion and/or development of new intellectual property.

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