Figuring out where small businesses stand in this economy is a bit like piecing together a puzzle in total darkness. You can do it, but it sure does take a while.
After months of research and combing through conflicting reports, I think I’m about as close to understanding where the majority of small businesses are as I’ve ever been. That should continue until a week from now, when the next poll reveals I’m completely wrong.
My argument was that even though access to credit is improving, many small businesses aren’t pursuing credit and are actually looking at spending little in 2011. I chalked that up to a lack of trust and an unwillingness or inability for banks and lenders to make it known that they are offering that credit, based on several reports I’ve read. Our sister site at PointBlank has pointed out how much financing and working capital Direct Capital has available, for example.
But it turns out I didn’t need a week to call that premise into question. Indeed, a Wall Street Journal report that I saw shortly after I posted yesterday makes a compelling argument that the lending situation hasn’t improved. In it, 54 percent of small businesses in a Pepperdine University survey of 1,200 firms found they could not raise capital in the past six months, while a full 60 percent say efforts to seek financing from banks were shut down like a sputtering laptop.
These kinds of conflicting surveys and reports are inevitable. It’s going to depend on where you poll, who you poll and how recently they’ve gone for financing. What remains clear is that while the situation seems to be improving, it’s not improving significantly enough to engender confidence in small businesses. Among at least some banks, there’s still a ton of applications being turned down. That’s…less than ideal.
So small businesses continue to struggle, banks and other lenders continue to either provide financing and not publicize it to the needed degree or loudly protest that they are providing it while failing to do so, and the world keeps on turning. Soon enough, I hope to have nothing but good news to impart.
Until then, talk to us about your access to capital, if you would.
Photo credit to rolve at http://www.sxc.hu/photo/1096880