LOS ANGELES, CA -- (Marketwire) -- 03/06/13 -- U.S. small business owners experienced a reduction in hiring and a decrease in demand for capital in quarter four of 2012 and quarter one of 2013, according to the most recent Private Capital Access (PCA) Index report, a private capital markets data survey produced quarterly by Pepperdine University's Graziadio School of Business and Management, in partnership with Dun & Bradstreet Credibility Corp. This downward trend matches predictions made using PCA data from the previous quarter and continues the downward trajectory the index has followed throughout the calendar year. The report is available for download at http://bschool.pepperdine.edu/accesscapital.
"It seems that even after the fiscal cliff was averted, businesses still feel unsettled about the future," said Dr. John Paglia, associate professor of finance and director of the Pepperdine Private Capital Markets Project at the University's Graziadio School of Business and Management. "Our data shows that businesses and lending institutions believe the weak economic forecast from 2012 will continue into 2013."
"The findings from the final quarter of 2012 and first part of 2013 reveal a steadily decreasing demand for traditional bank financing among small business owners," said Jeff Stibel, Chairman and CEO of Dun & Bradstreet Credibility Corp. "As success rates for bank financing have declined, business owners have become less willing to obtain bank debt, and many will be turning alternative methods of financing in the next six months, including grants, credit cards and loans from friends and family."
As analyzed at the end of Q4 and beginning of Q1, the following are the key trends in the private capital markets pertaining to the financing needs of small and medium-sized businesses, the accessibility of private capital and the transparency and efficiency of private financing markets:
•Both demand for external financing and access to capital reached their lowest point for the year in Q4 2012; •Half of the survey's respondents claimed that the current business financing environment is restricting their ability to hire new employees; •Only 28 percent of responding small businesses attempted to raise outside financing in Q4, down from a high of 33 percent in Q2; •Bank loan success rates continued declining, from 45 percent in Q1 2012 to 40 percent in Q4; •Expected demand for financing in the next six months continued to decrease across all categories, reaching 28 percent, its lowest point all year.
The Private Capital Access (PCA) Index Report is part of a series of quarterly indicators that will continuously gauge the demand for financing of small and medium-sized privately-held businesses, the level of accessibility of private capital and loans and the health of private financing markets.
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