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Small Businesses Are More Optimistic

By Kristin Gabriel

Republish: EasyPublish™ Published: 27Jun2011 Word count: 426 Viewed: 157 time(s) Get Free Content For Your Site

According to a recent small business survey, 26 percent of about 3,000 small to medium-sized (SME) businesses owners heard from reported higher sales this year, and while we are all seeing jobs stabilize and indications of improvement in business, these business owners have one major concern -- economic uncertainty. When it comes to the country's economic outlook, fewer SMEs believe the economy is currently in a recession.

During 2010 about 89 percent of these business owners surveyed believed the economy was in recession. But 2011, the percentage has dropped down to 78 percent,. Furthermore, 64 percent of business owners are reporting revenue in line with or higher than in 2010. At that time 55 percent said revenue was as good as or better than the previous 12 months.

What's more, it appears that while 22 percent of these SMEs said they plan to hire employees this year, almost 70 percent of them said they will keep staffing levels intact over the next 12 months. US banks have been trying to focus on small businesses, so the perceptions of banking has improved, which was indicated by 43 percent of small business owners who viewed their banks as helpful especially in this past year.

Ironically although perceptions of banks have improved, the number of small business owners ewho have actually gotten a loan is rather small. We are seeing many more SMEs using factoring, which does not include tough credit requirements or long application processes.

Small business owners were asked what the most significant challenge facing their company is today. 27 percent agreed that it is economic uncertainty, and poor sales came in second at around 16 percent. Over the last six months only 20 percent of them did bporrow funds.

Invoice factoring is the purchase of your receivables accounts by a factor, and this differs from traditional bank loans involving two parties. Factoreing, on the other hand, involves three parties. Banks base their decisions on a company's credit worthiness, while factoring is based on the value of the company's receivables. Invoice factoring requires no minimums or maximums, and no long-term commitments.

Many small businesses are experiencing delayed customer payments for delivered products and/or services; however, every company needs cash on hand in order to sustain and grow their business. Spot factoring benefits businesses by turning receivables into immediate cash.

(Source: US Bank: Between April and May of 2011, U.S. Bank researchers heard from 2,923 owners of businesses with $10 million or less in annual revenue.

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