Capital One Small Business Banking today released the results of its Q1 2010 Small Business Barometer, a quarterly survey of small businesses across the nation gauging their current financial condition and business projections for the next six months. A large majority (nearly 80 percent) of the small business owners surveyed in the first quarter of this year believe that economic conditions are either improving or holding steady. In addition, 39 percent of small business owners report that their company’s financial situation is better than it was last year (an increase of 11 percentage points over fourth quarter results) while 38 percent say that the firm’s finances have been stable over the past 12 months.
“While financial conditions are not back to where they were pre-recession, our survey results show that there is some positive momentum and reveal that small business owners across the nation believe things are beginning to turn around,” said Robert M. Kottler, Executive Vice President of Small Business Banking at Capital One. “The resurgence of small businesses within the U.S. will be a gradual process, but with growing access to capital and steady improvement in financial conditions, it’s clear the industry is trending in the right direction.”
Access to credit and spending plans
While most (70 percent) of the small business owners surveyed said they are able to access the credit or financing they need and more than half (60 percent) plan to maintain their current level of spending on business development and investments, most remain cautious when asked about hiring plans. The majority (62 percent) of those surveyed said they do not have plans to hire new talent over the next six months.
Looking ahead to future growth
While many small business owners nationwide appear to be experiencing gradual improvements financially, they continue to be mindful of their plans for future growth. Just over two-thirds (69 percent) said they are looking to grow their business by increasing turnover, sales, and number of customers and 33 percent would like to expand their premises, add new sites or move into new markets. When looking ahead to potential challenges over the next six months, almost half (48%) of small business owners cite the ability to obtain new customers as one of the biggest challenges they will face, while 30 percent cite the need to maintain existing customers.
Bank financing is still the primary funding source for the growth of most small businesses. Half of the small business owners surveyed intend to finance their growth through commercial banks and lenders. One-third (33%) intend to finance their growth through personal savings, and 9 percent intend to use financing from outside partners.
Survey Methodology
The findings reported in this release are from a telephone survey conducted by the opinion research firm, Braun Research of Princeton NJ. Braun Research interviewed a nationally-representative sample of 1,915 for-profit small businesses in the U.S., weighted to Dunn and Bradstreet counts of all businesses nationwide by employee size and geography. Samples were also taken in New York, New Jersey, Louisiana, Texas and the Washington, D.C. area. Small businesses are defined as those with less than $10 million in annual revenue. The interviews were conducted from April 1-13, 2010. All interviews were conducted by telephone at their places of business. One respondent per business was conducted. The margin of error is ± 4.38 percentage points at the 95% confidence level. Interviews were monitored at random. Sampling for this study was conducted using a national sample of businesses drawn from InfoUSA. All interviews were conducted using a computer assisted telephone interviewing system. Statistical weights were designed from the United States Department of Commerce to ensure proper inclusion of all SIC codes.
About Capital One Small Business Banking
Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A. and Capital One Bank (USA), N.A., had $117.8 billion in deposits and $200.7 billion in total managed assets outstanding as of March 31, 2010. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients. Capital One, N.A. has approximately 1,000 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia, and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol “COF” and is included in the S&P 100 index.
Capital One Small Business offers a range of products and services to meet small business needs, including small business credit cards, loans and lines of credit; business checking, money market and savings accounts; and payroll and merchant services. Capital One has a team of bankers committed to deepening our relationships with small business owners and helping them achieve their financial goals.
Capital One Bank is a registered trade name of Capital One, N.A.
