Some small business owners say they are having an easier time getting credit now than in recent years.
The result of having credit has helped them stay open, hire more people and expand services, according to a Wells Fargo-Gallup Small Business Index survey released this week.
Since January, the number of small business owners who found it difficult to get credit in the past 12 months declined by 3 percentage points, from 33 to 30 percent. And, the number of business owners expecting difficulty securing credit over the coming 12 months fell by 6 percentage points, from 38 to 32 percent.
That improved optimism about future credit availability contributed to the Small Business Index’s 8-point growth over last quarter from 15 to 23, and is the strongest index score recorded since the third quarter in 2008 when the index was at positive 45, Wells Fargo reported.
Thirty-nine percent of small business owners said they were able to get the credit they needed in the past year. Twenty percent said they were not able to get the credit they needed and 38 percent of small business owners said they did not require credit.
The small business owners who did obtain credit said it made it easier to run their business on a daily basis; helped the business to stay open; and allowed them to expand products or services.
When asked about the amount of debt they carry today compared with one year ago, 32 percent of business owners said they are carrying less debt; 20 percent are carrying more debt and 47 percent are carrying about the same amount of debt.
Looking ahead, 14 percent of small business owners said they planned to apply for new credit over the next year for both short-term needs, like operating expenses, and long-term needs like capital investments.
“The survey results are consistent with the de-leveraging trend we’ve seen over the last two years among the small business owners we serve,” said Marc Bernstein, Wells Fargo’s head of small business. “Many business owners who took on a significant amount of debt before or during the Great Recession have been focused on paying down existing debt and putting their business in a better position as the economy recovers.”