Conditions for small businesses are improving, at least with the uncertainty of the election behind them and a generally positive view of the fundamentals ahead.
However, access to credit, and in some cases the lack thereof, may determine whether these mainstays of the United States economy can benefit from the strategy. opportunity to expand.
November PYMNTS Intelligence Report “The Main Street Credit Dilemma: Financing Barriers Stimulate SMB Growth” found that most small and medium-sized businesses (SMBs) have no access to credit cards. Only 37% have access to any credit cards, with 32% having access to business credit cards. In other words, approximately 5% of Main Street SMBs must rely exclusively on personal credit cards to finance their business.
Among firms generating $1 million or more in annual revenue, nearly half have access to credit cards, the report found. In contrast, only 25% of those with annual incomes of $150,000 or less said the same. When the credit is open, the cards are used from SMBs for strategic needs and purposes roughly equally.
Looking Forward
Strategy and growth are likely to be at the fore mind for SMBs in the first few weeks of the new year, given that they are generally confident about their prospects in the coming months.
Confidence among small businesses rose last month to a level not seen in six years. according to a Tuesday (January 14) press release BY National Federation of Independent Business (NFIB). of NFIB Small Business Optimism Index it was 3.4 points higher in the last reading at 105.1, ahead of the consensus of around 102.
“Optimism on Main Street continues to rise with improved post-election economic outlook,” NFIB Chief Economist Bill Dunkelberg the notice says. “Small business owners feel more confident and hopeful about it the economic agenda of the new administration. Expectations for economic growth, lower inflation and positive business conditions have increased in anticipation of pro-business policies and legislation in the new year.”
The net percentage of small business owners expecting the economy to improve rose 16 points from November to a net 52% (seasonally adjusted), the highest since the fourth quarter of 1983, according to the release. The percentage of small business owners who believe it is a good time to expand their business rose six points to 20% (seasonally adjusted), the highest reading since February 2020.
Constant worries
However, inflation and meeting labor demands remain major concerns for SMBs. More than half of business owners who are actively hiring said there was a shortage of qualified applicants, according to the release.
Meanwhile, the PYMNTS Intelligence report “Wages without waiting: Using instant payments to increase employee satisfaction” revealed that flexibility with the payment of wages as they ARE earned it can be a competitive advantage for firms.
The report found that 83% of individuals want more frequent pay schedules, and 75% of millennials said the availability of access to earned wages would influence their acceptance of a job offer. Additionally, 96% of corporations that offered access to earned wages said their employees liked it AND the offer helped attract the talent and labor they needed.
