Two Thirds of Small Businesses Applying for Credit Today Get the Full Amount

With a score of 69.7, the MetLife & U.S. Chamber of Commerce Small Business Index (SBI) for Q3 of 2018 achieved the highest level in the history of the survey.

MetLife and U.S. Chamber of Commerce: Q3 2018 Small Business Index

The high level of optimism in the economy is in part also responsible for more businesses getting the full amount of financing they applied for. This was the case for more than two thirds or 67% of the applicants. Another 11% only received a partial amount while 15% were rejected.

Right after the financial crisis access to capital was a challenge for most small businesses. As the economy kept improving along with some government intervention, more businesses were finding the funding they needed.

Tom Sullivan, U.S. Chamber vice president of small business policy, said Congress has taken steps to make it easier for small businesses to get capital. In the press release, Sullivan said, “We are moving in the right direction, but more policies that ease small businesses’ access to financing need to occur to ensure this vital sector of our economy continues to grow, create jobs, and positively impact communities across the country.”

The SBI was designed to measure the sentiment of small businesses across a range of issues including operations, expectations, and their environment.

The survey for Q3 is an Ipsos poll which was conducted from June 12 – July 27, 2018, via the phone. A sample of 1,000 small business owners and operators from the continental US, Alaska, and Hawaii took part.

The vast majority of companies or 89% are businesses with less than 20 employees, with 61% of those making up firms with fewer than five workers.

Access to Capital

The quarterly spotlight in the survey report was credit. And rightly so because as more credit becomes available small businesses can make the necessary investments to grow.

In the survey, 27% of the respondent said the loans they received will be used to purchase new equipment followed by 20% who will use the funds to expand or upgrade their facilities. Only 11% said the capital was going to be used to keep their businesses afloat.

MetLife and U.S. Chamber of Commerce: Q3 2018 Small Business Index

When it comes to getting capital, businesses which have been around longer had a better chance of getting full funding.

For those with 20 plus years in operation three in four or 75% of them were able to get the full amount. It went down by 11% for businesses with 11 to 20 years at 66% and it was 51% for enterprises with 10 years or less.

Other Findings From the SBI

Nationally, 55% of small business said they felt optimistic about the US economy, which ties the highest rating in the history of the survey. Half of the small business owners said their local environment was good.

As to revenue expectations, it dropped six points to 56%, but only 10% of businesses are planning to lower their investment in the coming year.

This leads to how businesses are operating, and according to the survey 64% are reporting good overall health. Eight out of ten owners said they feel comfortable about their cash flow and one in five businesses have hired more people over the past year.

MetLife and U.S. Chamber of Commerce: Q3 2018 Small Business Index

You can read the rest of the data about the MetLife & U.S. Chamber of Commerce Small Business Index (SBI) for Q3 of 2018 here (PDF).

Images: U.S. Chamber of Commerce

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