Studies: Capital Flows Still Hamper Small Business Growth
LOS ANGELES–(BUSINESS WIRE)–The most recent Private Capital Access (PCA) Q2 Index report, produced quarterly by Dun & Bradstreet Credibility Corp. and Pepperdine University’s Graziadio School of Business and Management, shows tight credit markets continue to hamper growth at the smallest US companies — those with less than $500,000 in revenue — even during the weeks leading into small business month, the month of May. These small firms make up roughly 91% of U.S. companies.
“We need to do something to help our smallest businesses and there is no better time than during small business month,” said Jeff Stibel, Chairman and CEO, Dun & Bradstreet Credibility Corp. “The results from this second quarter study show lack of financing consistently hinders growth at the smallest companies, which in turn restricts their ability to hire. These businesses need to access capital to fully stabilize the economy.”
Built-In Limitations To Growth
“This research demonstrates just how many companies are limited in their growth,” said Dr. John Paglia, director of the Pepperdine Private Capital Markets Project and associate professor of finance at Pepperdine University’s Graziadio School of Business and Management. “What’s at stake is growth for a strong majority of US companies, especially since these small companies make up more than 90 percent of US businesses.”
The survey results show that small businesses with revenue less than $500,000 still have difficulty accessing needed financing, with 63 percent of companies reporting that the current financing environment is restricting their overall growth. The study also finds that the smallest of businesses are increasingly relying on their personal savings and investments, with 75 percent of respondents saying they transferred personal assets to finance business ventures.
The joint Dun & Bradstreet Credibility and Pepperdine University study also suggests that lack of financing could lead to layoffs, slower hiring and business shutdowns. Of those responding, an astounding 84 percent say they expect the current financing environment to restrict their hiring ability.
About the Pepperdine Private Capital Markets Project
The Pepperdine Private Capital Markets Project seeks to understand the true cost of private capital and the investment expectations of private business owners; providing lenders, investors and the businesses that depend on them with critical data to make optimal investment and financing decisions. The Project’s small business owner surveys draw their sample from a database of businesses maintained by the Dun & Bradstreet Credibility Corp., research partners for the Pepperdine PCA Index Quarterly Reports. Reports and more information are available at http://bschool.pepperdine.edu/privatecapital.
About Dun & Bradstreet Credibility Corp.
Dun & Bradstreet Credibility Corp. is the leading provider of 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 companies 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 or follow the company on Twitter via @DandB.
About Pepperdine University Graziadio School of Business and Management
Founded on the core values of integrity, stewardship, courage, and compassion, Pepperdine University’s Graziadio (GRAT-ZEE-ah-DEE-oh) School of Business and Management has been developing values-centered leaders and advancing responsible business practice since 1969. Student-focused, experience-driven, and globally-oriented, the Graziadio School offers fully accredited MBA, Masters of Science, and bachelor’s completion business programs. More information found at http://bschool.pepperdine.edu/newsroom/.