Q4 2016 PCA Index: The State of Small Business in the U.S.
Both small and medium-sized businesses reported that economic uncertainty was the number one factor preventing them from hiring. Businesses also reported that a Federal interest rate hike could negatively impact their operations, with 31 percent (up 2 percent from 2015) of medium-sized companies reporting a Federal interest rate hike could restrict their ability to secure contracts and expand to new markets.
Despite the reported lack of economic confidence, more small and medium-sized companies are planning to seek financing than they were in Q4 2015.
- 35% of small businesses and 27 % of mid-sized businesses are planning to raise capital in the next six months
- 65% of small businesses cited growth or expansion (up 5% from 2015) as their motive for a loan, versus 56% of medium-sized companies (up 10% from 2015).
- 62% of small businesses cited working capital fluctuations and increased demand as the other two top reasons for financing
- Working capital fluctuations and increased demand were also top of mind for mid-sized businesses when seeking outside capital (46% cited increased demand and 57% working capital).