California small business loans appear to be awarded at a rate lower than the national average, though the state has higher rates of planned growth. Only 36 percent of businesses who applied in Q2 2015 were awarded a California small business loan, compared to a slightly higher 37 percent nationally, according to the most recent Private Capital Access Index* from Pepperdine University and Dun & Bradstreet. Although the rate is lower than the national average, California small business loans have seen an increase of 5 percent since Q1 2015. Loans may need to continue increasing for California businesses to keep growing, since the state’s business owners are planning to hire and are in need of financing more than the rest of the nation. Although growing, California small business loans are still in short supply comparatively, and it may be causing small businesses to feel restricted: 60 percent of those surveyed feel their growth opportunities are restricted, and 51 percent feel their ability to hire is restricted as well. Both of these data points are above the national average.
Without better access to small business loans, California business owners may have to make up the loss themselves. In Q1 2015 over a third of California small businesses surveyed were forced to expend their personal assets to fund their business needs. If loans continue to be difficult to achieve, more businesses may find themselves relying on personal assets to fund their growth, and if they can’t turn to their personal assets in times of need, then they may find difficulty accomplishing their objectives.
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