Small business owners say they are more optimistic about the economy, although their enterprises remain challenged with cash flow problems and according to new research from Discover’s Small Business Watch.
The second consecutive month for a rise in optimism among the nation’s small business owners doesn’t connect with some of the discouraging indicators the report reveals:
ü More than half say they’ve held off on bill payment because of cash flow issues in the past 3 months.
ü Nearly 70 percent of small biz owners say their take-home pay has taken a hit in recent months.
ü Almost 60 percent rate the economy as “poor”, and half of them said it was getting worse.
The Discover Small Business Watch is compiled each month by Rasmussen Reports, an independent research firm, based on interviews and survey responses from approximately 750 small business owners. The July 2009 report finds entrepreneurs are increasingly borrowing to keep their businesses operating; but more are being forced to seek alternative methods outside of applying for a loan or line of credit:
ü 65 percent of small business owners still have not borrowed money to pay their business expenses; but the number of those who have borrowed was 33 percent in July, up from 19 percent in October 2008.
ü Those who are borrowing aren’t using traditional sources. When asked if they have applied for new credit cards, lines of credit or loans, 82 percent said they had not, while 17 percent said they had and 2 percent weren’t sure. Of those who did apply for loans or credit, 44 percent said their applications were approved, 31 percent were rejected, 7 percent were pending and 18 percent weren’t sure.
ü Current economic conditions have forced 69 percent of owners to reduce the amount of money they take home from their small businesses, up from 55 percent in October 2008.