A new survey from Pepperdine University’s Graziadio School of Business and Management, and Dun and Bradstreet Credibility Corporation, found that bank loans still top the list of expected financing sources for businesses.
Of the 5,977 respondents 68% of those seeking financing in the next six months said they will pursue a bank loan, 40% said they will use a business credit card, and 36% will look at a credit union or Community Development Financial Institutions Fund.
The survey, which is designed to measure the demand for, activity, and health of the private capital markets, shows a marked contrast between similar data collected in December 2011.
The previous survey found that only 37% of respondents that had attempted to raise capital between December 2010 and December 2011 had tried to do so through bank loans and that nearly 50% of businesses looking for financing planned on using credit cards. The data showed that of the 523 private businesses looking for capital in December, only 41% were successful in securing it.
The ability of small and medium sized businesses to gain access to financing is considered by <a href=" http://online.wsj.com/article/SB10001424052748703481004574646140462691798.html"many in the finance industry to be one of the more important leading economic indicators. As Forbes Columnist Jim Blasingame wrote in February, “since small businesses generate over half of [U.S.] GDP, it’s easy to see that the health of the banking industry, and its receptiveness to small business, is vitally important to the U.S. economy.”
Blasingame’s sentiments about the importance of small business finance are echoed by Thomson Reuters, who annually publishes its Small Business Lending Index, because “small businesses generally repond to changes in economic conditions more rapidly than larger businesses do.”
Follow Alex Wukman on Twitter @AlexWukmanCMN
Facebook Comments