To Grow or Not to Grow? The Q2 2016 State of Small & Micro Businesses in the U.S.

Once a quarter, Pepperdine University’s Graziadio School of Business and Management and Dun & Bradstreet poll small and medium-sized businesses across the United States to learn more about those companies’ growth and access to capital. This quarter, the survey also polled microbusinesses across the nation and discovered new insights. Microbusinesses surveyed are planning to grow more than their small and medium counterparts, however, they are also feeling more restricted by the current economic environment. Small business, while receiving more loans than the microbusinesses surveyed, are still not getting the funding they need. Below are the Q2 2016 highlights*:

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Microbusiness: 

• Microbusinesses across the nation are planning to grow at higher rates than their small and medium counterparts. Thirty percent of microbusinesses surveyed are planning to raise financing in the next 6 months, while only 17% of medium businesses plan to raise funding in the same period. 

• However, microbusinesses are feeling more restricted by the current business environment – 51% of microbusinesses surveyed feel their ability to hire new employees is restricted, compared to only 21% of medium businesses who feel the same. 

• Banks are primarily lending to medium businesses, and microbusinesses surveyed are falling behind: Only 17% of microbusinesses who applied for a bank loan in Q2 2016 received the loan, compared to 70% of medium businesses.

• Microbusinesses are seeking capital from alternative sources and are relying on personal assets more than their counterparts. For microbusinesses surveyed, 72% rely on personal credit cards for capital, which is 5% higher than medium businesses.

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Small Business: 

• Fifty-two percent of small businesses surveyed feel their growth opportunities are restricted, while only 33% of medium businesses feel the same.

• Despite feeling restricted, small businesses are asking for more financing than medium businesses (27% compared to 20%).

• Small businesses are having to rely on alternative funding or personal assets due to a lack of bank loans. Thirty-four percent of small businesses transferred personal assets to their business, while only 13% of medium businesses transferred personal assets, a 21% difference. 

View Full Infographic

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PCA in the News:

Despite Improved Access to Capital, Small Businesses Still Heavily Dependent on Personal Resources

How Small Biz Plans to Finance Their Growth

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PCA in the News:

Small Businesses Report Increased Access to Capital, Greater Demand for Financing, and Optimism for Future Growth

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Traditional Bank Loans Still Pose Challenge for Small Businesses

Study Reveals Top Challenges Small Businesses Are Facing

China’s slump gives Main Street a reason to pause

Some good news: The group that plans to hire

 Businesses Worry Despite Growth, Dun & Bradstreet Study Says

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Featured Photo Credit: photosum, Twenty20