Small business optimism drops off in July

Jessica SarterSmall Business Lending

In recent years, optimism is one sentiment – whether among small businesses or consumers – that has been hard to come by. After several reports have shown that consumer confidence, as well as spending, has been on the rise through the first half of 2012, one new study shows that optimism among small business owners has gone down.

This is likely the product of credit shortages among the nation’s small businesses, as many reports show that entrepreneurs and other owners have had difficulty finding adequate small business loans and other types of financing. Additionally, consumer spending, while growing gradually from the recession, has yet to make a substantial move in the right direction.

The National Federation of Independent Business recently released its latest Small Business Economic Trends data regarding economic optimism throughout the nation’s smaller firms. The report shows that after a steep incline in optimism between the latter half of 2009 and through 2011, the NFIB Small Business Optimism Index dropped off in the first two quarters of 2012.

The data used is compiled of survey responses from approximately 740 small businesses that are randomly selected from across the county. In the latest iteration of the index, measuring certain crucial aspects of business in July, roughly 8 percent of respondents believed the economy would improve, while the vast majority are not as encouraged.

Only 5 percent of small business owners surveyed cited plans to increase employment, while 21 percent believe they will have to make capital outlays in the coming months. All in all, the numbers reflected little to no change from data recorded through the months preceding the most recent report.

As for the availability of credit in the sector, 30 percent of respondents said that all their credit needs were met, while more than half said they did not want to apply for a loan, the NFIB explained. Additionally, sentiments regarding the coming months were low in this respect, as the index recorded a drop of 7 percent – approaching mid-2007 levels – in owners believing credit availability will improve.

Still, the nation’s small business owners continue to fight against the recession, as several advocacy groups and federal agencies up their support of the crucial sector. This includes the U.S. Small Business Administration providing new guidance and financial offerings to boost lending, as well as major banks and even small, regional ones easing lending standards.

Earlier this month, The Wall Street Journal reported that banks in the nation eased terms and requirements on loans in the second quarter. The news provider, citing data from the Federal Reserve, explained that this was more in line with mid-market businesses, which lenders have recently viewed as safer candidates for loans.

As for small business lending, the outlook is still in flux. This is why using a service like BoeFly is an excellent decision, as the firm provides a much more efficient – and effective – loan application process.

With thousands of participating lenders, BoeFly works to match loan applicants with the financial institution best-suited to the owner’s specific needs, and all with only one loan application.