Study reveals that capital access has increased, while demand is
down from Q1 2014
The Q2 2014 Private Capital Access (PCA) has increased 2.3 percent
compared to Q1 2014.
41 percent of respondents say the current business environment is
restricting their ability to hire new employees, a 5 percent decrease
from Q1’s 46 percent.
58.4 percent of private businesses (who attempted to get financing)
attempted to get a bank loan in the last three months and 54 percent
of them were successful.
24.9 percent of those respondents (that attempted to get financing)
applied for asset-based loan in the last three months and 30 percent
of them were successful.
LOS ANGELES--(BUSINESS WIRE)--
Results from the latest Dun & Bradstreet Credibility Corp. and
Pepperdine Private Capital Access (PCA) Index quarterly
report show access to capital for businesses of all sizes continues
to increase in Q2 2014 from the previous quarter. The quarterly index
measures the accessibility and demand for capital among the nation’s
small businesses, as well as the transparency and efficiency of private
financing markets. The Q2 2014 PCA Index summary report is available here.
The PCA Index number continues to rise, hitting its all-time high (since
Q2 2012) of 28.9 percent. The all-time low was in Q1 2013, with an index
value 25.6 percent. However, the PCD (Private Capital Demand) Index
continues to reflect weakness in demand for financing, showing a 3.7
percent decrease from Q1 demand indication. Nearly 67 percent of
respondents credit lack of cash flow for not planning to raise growth
financing in the next six months.
While demand for capital is on the decline, 52 percent of respondents
are planning to hire more employees in the next six months.
“What we’re seeing so far in 2014 with our PCA Index is that small
businesses are optimistic about growth, but hesitant to seek capital
from outside sources based on a misconception that they aren’t
qualified,” said Jeff Stibel, Chairman and CEO of Dun & Bradstreet
Credibility Corp. “The truth is in the numbers that there continues to
be a disconnect between perception versus reality as the PCA Index
continues to rise as small businesses are consistently achieving success
with outside funding from banks and alternative sources. It’s imperative
that this disconnect is resolved if we want small businesses’ growth to
fuel our economy’s recovery in this recession.”
“The uptick in hiring is a sign that our economy is growing and is cause
for cautious optimism,” said Craig R. Everett, PhD, Director of the
Pepperdine Private Capital Markets Project. “However, it remains to be
seen how many new jobs will be created and if they are full-time,
part-time or seasonal employment. Raising minimum wage in a number of
cities may also impact small businesses’ ability to hire additional
workers. The continued downward trend in the demand for capital is
certainly problematic for economic growth prospects.”
The survey found that while 59 percent of respondents characterize the
current business environment as difficult to raise new business
financing, over half of those businesses that actually did apply for a
bank business loan were successful. Nearly 28 percent of the respondents
plan to seek new financing in the next six months, with 66 percent of
these businesses seeking to obtain a bank business loan.
Other key findings from the Index include:
The Q2 2014 Index report was derived from 1,251 completed responses
collected from May 9 to May 17, 2014 and contrasted with survey results
collected from January 29 to February 28, 2014.
Download the latest index data at http://bschool.pepperdine.edu/accesscapital
and follow us on Twitter at @GraziadioSchool
About Pepperdine University Graziadio School of Business and
Founded on the core values of integrity, stewardship, courage, and
compassion, Pepperdine University’s Graziadio School of Business and
Management has been developing values-centered leaders who advance
responsible business practice since 1969. Student-focused,
experience-driven and globally oriented, the Graziadio School offers
fully accredited MBA, Masters of Science, bachelor’s completion and
non-degree executive business programs for business professionals,
entrepreneurs, managers and senior executives at all stages of their
professional and personal development. More information: http://bschool.pepperdine.edu/newsroom
About Dun & Bradstreet Credibility Corp.
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.
Allison+Partners for Dun & Bradstreet Credibility Corp.
Gardell Kreuter, 646-428-0618
& Bradstreet Credibility Corp.
Lauren Simpson, 310-919-2230
Pepperdine University’s Graziadio School
Source: Dun & Bradstreet Credibility Corp.