Mid-sized businesses show decreased capital demands; Smallest businesses indicate optimism
SEATTLE (NOVEMBER 12, 2013) – The nation’s smallest businesses reported a greater interest in accessing capital during Q4 to expand their business, a signal that they are optimistic about market conditions and their growth potential leading into 2014.
In contrast, mid-sized US businesses trimmed their demand for capital for a fifth straight quarter, an indicator that business growth conditions favor smaller businesses over mid-sized US companies.
The results are part of the most recent Pepperdine Private Capital Access (PCA) Index report, a survey produced quarterly by Pepperdine University’s Graziadio School of Business and Management in partnership with Dun & Bradstreet Credibility Corp.
The Private Capital Demand (PCD) Index, which aggregates data from both small and mid-sized businesses, increased for the first time since early 2013, buoyed by smaller companies that expressed a stronger late-year interest in obtaining financing. The overall number indicates the environment for lending has rebounded to its position at the start of 2013, reversing losses experienced during the third quarter.
“The Q4 Private Capital Demand Index demonstrates that small businesses are not only confident, but also ready to turn that confidence into action,” said Jeff Stibel, Chairman and CEO, Dun & Bradstreet Credibility Corp. “What’s important is that the smallest companies are still expressing interest in lending, even during a period where the government shutdown instilled a sense of unease. It demonstrates that they are resilient and optimistic about future market conditions.”
“Despite the dip in demand among mid-sized companies, this study still indicates an important level of stability,” said Craig R. Everett, PhD., director of the Pepperdine Private Capital Markets Project at the Graziadio School of Business and Management. “It’s very encouraging to see growth in demand, particularly among small businesses, especially since we saw that demand significantly contract after 2012. Demand for capital in the private sector, coupled with access to that capital, are fundamental drivers of economic growth.”
The study defines a small business as those having $5 million or less in annual revenue, whereas a mid-sized business has between $5 million and $100 million in annual revenue.
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(R) 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/.
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For more information:
Dun & Bradstreet Credibility Corp.
Pepperdine University Graziadio School of Business and Management