Dun & Bradstreet Credibility Corp. and Pepperdine University’s quarterly study shows small and medium sized businesses are optimistic for 2015
LOS ANGELES, Calif. (December 10, 2014) – Small-and medium sized businesses’ optimism about raising capital has increased since last quarter according to results from the latest Dun & Bradstreet Credibility Corp. and Pepperdine’s Private Capital Access (PCA) Index. The fourth quarter (Q4) also saw an increase in confidence about business growth in 2015.
Dun & Bradstreet Credibility and Pepperdine University’s PCA quarterly index, which measures the accessibility and demand for capital among the nation’s small and medium sized businesses as well as the transparency and efficiency of private financing markets, found that eighty-one percent (81%) of respondents were extremely or somewhat confident that their business would grow in 2015, including forty-seven percent (47%) who plan to hire from one to five employees in the next six months. At the same time sixty-three percent (63%) of respondents expect an increase in revenue in the upcoming year.
“Both small and medium sized businesses are showing optimism for growth as we head into the new year,” said Jeff Stibel, CEO and Chairman of Dun & Bradstreet Credibility Corp. “Demand is up, access to capital is up, and businesses are planning on hiring more employees which will further drive the unemployment rate down. This type of momentum is exactly what our economy needs.”
Small businesses’ access to capital from sources other than traditional bank loans has also continued on an upward trend. Alternative financing options that saw the biggest increase from the third quarter (Q3) include crowdfunding (27% success rate in Q4 compared to 17% in Q3), friends and family (up to 76% from last quarter’s 69%), and monetary awards and credits through the U.S. Department of the Treasury’s Community Development Financial Institutions (CDFI) financing (up to 22% compared to 18%).
“Alternative lenders are taking notice of small business topline growth and should benefit by extending credit at greater risk,” said Craig R. Everett, Ph.D., Assistant Professor of Finance and Director of the Pepperdine Private Capital Markets Project. “While small business lending has increased, these improvements have been mainly enjoyed by enterprises at the larger end of the category. However, traditional lenders, who have sought warmer prospects with enterprises at the larger end of the category may risk standing out in the cold with smaller returns.”
Other key findings from the Index include:
- More than fifty percent (51%) of respondents reported an increase in revenue over the last twelve months, twenty-two percent (22%) reported that revenue stayed flat, and twenty-seven percent (27%) reported a decline over the past year.
- On average, 2014 showed a higher success rate for bank loans with respondents reporting over fifty percent (50.2%) compared to 2013’s average of 40 percent (39.7%) success rate.
- Small businesses showed a higher success rate for asset-based loans in Q4 with a twenty-nine percent (29.3%) success rate compared to twenty-six percent (26.5%) from last quarter.
The Q4 2014 Index report was derived from 2,131 completed responses collected from small and medium sized businesses from October 15 to November 7, 2014 and contrasted with survey results collected July 22 to August 15, 2014. The Q4 2014 PCA Index summary report is available here.
About Pepperdine University Graziadio School of Business and Management
A leader in cultivating entrepreneurship and digital innovation, The Graziadio School of Business and Management at Pepperdine University focuses on the real-world application of MBA-level business concepts. The Graziadio School provides student-focused, globally-oriented education through part-time, full-time, and Executive MBA programs at our 5+ Southern California campuses, Northern California campus, as well as through online and hybrid formats. In addition, The Graziadio School offers a variety of Master of Science programs, a Bachelor of Science in Management degree completion program, Presidential and Key Executives MBA and executive education certificate programs. Follow the Graziadio School at www.facebook.com/pepperdine.graziadio and https://twitter.com/graziadioschool
Dun & Bradstreet Credibility Corp. is the leading provider of business credit building and credibility solutions for businesses. The company helps businesses establish their credit with a D&B D-U-N-S® Number and provides the only business credit solution available to businesses looking to build, monitor, and impact their business credit and credibility. The company’s headquarters are in Los Angeles, CA with offices throughout the United States. For more information on the company, please visit www.DandB.com. Twitter: @DandB
Alexandra Gardell Kreuter
Allison+Partners for Dun & Bradstreet Credibility Corp.
Dun & Bradstreet Credibility Corp.
For Pepperdine University’s Graziadio School