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.
Among 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.
“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.