Capital One Bank Releases Results of its National Small Business
MCLEAN, Va., Nov 18, 2010 (BUSINESS WIRE) --
Capital One Small Business Banking today released the results of its third quarter Small Business Barometer survey. The quarterly survey polls small businesses across the nation, gauging their current financial condition and business projections for the next six months. Third quarter survey results suggest that many U.S. small businesses are slightly less optimistic about the strength of the economy and their own financial position relative to last quarter. While many small businesses polled report that they are experiencing stable economic conditions and steady financial performance for their businesses, a decreased percentage believe economic conditions are improving and fewer say that their financial position has improved since last year. Accordingly, an increased percentage of small businesses surveyed plan to hold spending on business development and investments at current levels rather than increasing spending. On the hiring front, however, an increased number of small businesses report plans to add positions over the next six months.
"Our survey results for the third quarter of this year suggest that financial performance is stable for many of the small businesses we surveyed, but some respondents have a more cautious outlook about their growth and expectations for the broader economy and their business," said Robert M. Kottler, Executive Vice President of Small Business Banking at Capital One. "It is a positive sign, however, that most small businesses believe they have access to the credit and financing they need and many are making plans to increase their workforce and begin hiring again."
Outlook and Financial Performance
The survey results suggest that the overall economic outlook of U.S. small businesses has continued to weaken slightly. While financial performance remains stable for most small businesses, fewer respondents report improved finances compared to last quarter.
- In the first quarter, 39 percent of small business owners surveyed said that economic conditions for their business were improving, but this number dropped to 32 percent in the second quarter of this year and 27 percent in the third quarter. Nearly half (49 percent) of small businesses report stable conditions and one-quarter (24 percent) say that economic conditions are getting worse.
- Thirty percent of small business owners polled report that their firm's financial position is better than it was one year ago, down seven percentage points since last quarter. On a year-over-year basis, however, this number is up six percentage points. About half (51 percent) of small businesses surveyed say that their firm's financial position has held steady relative to one year ago. This number increased 8 percentage points since last quarter. Consistent with the last two quarters, only 18 percent of small businesses report that their financial position has worsened compared to one year ago.
Spending and Hiring
Most U.S. small businesses polled plan to continue holding off on additional business development and investment spending in the near-term, but the percentage of respondents reporting plans to hire increased slightly.
- The majority (66 percent) of small businesses say they plan to keep business development and investment spending at current levels for the next six months. Fewer small businesses plan to boost spending this quarter - only 16 percent - compared to 21 percent in the second quarter. Consistent with results from the last three quarters, 15 percent of respondents reported plans to decrease spending.
- Thirty percent of small businesses polled in the third quarter plan to add employees to the payroll over the next six months, consistent with results from the first quarter of 2010 but 4 percentage points higher than last quarter. Still, 63 percent of small businesses say that they will not hire additional employees during the same period.
Availability of Financing
The survey results suggest that most small businesses continue to have adequate access to credit and financing.
- Nearly three-quarters (73 percent) of small businesses surveyed report that they are able to access the financing they need while 22 percent say they do not have adequate access to credit and financing.
- About one-quarter (23 percent) of small businesses in the survey say that securing the capital needed to continue operations will be one of the biggest challenges they face over the next six months.
- When asked about funding sources for financing their firm's growth, half (52 percent) of respondents say they will seek financing from a bank or commercial lender, consistent with past results. A slightly increased number of respondents say they will rely on personal savings to finance growth (40 percent compared to 35 percent last quarter).
Gulf Oil Spill
Last quarter, the Small Business Barometer survey found that there were significant uncertainties about the potential longer-term consequences of the Gulf oil spill. Results from the third quarter suggest that the impact of the spill has not spread significantly and fewer respondents believe they will be affected long-term.
- To date, only 11 percent of small businesses surveyed say that their business has decreased since the spill, the same as last quarter. Six percent report increased business.
- Only 13 percent of small business owners or managers nationally believe the disaster will have a moderate to significant impact on their business, down from 25 percent in the second quarter. Ten percent say that it's too early for them to predict whether or not their business will be affected, whereas 17 percent of respondents were unsure about the longer-term impact last quarter.
The findings reported in this release are from a telephone survey conducted by the opinion research firm, Braun Research of Princeton NJ. Braun Research interviewed a nationally-representative sample of 1,901 for-profit small businesses in the U.S., weighted to Dunn and Bradstreet counts of all businesses nationwide by employee size and geography. Samples were also taken in New York, New Jersey, Louisiana, Texas and the Washington, D.C. metropolitan area. Small businesses are defined as those with less than $10 million in annual revenue. The interviews were conducted from September 14-October 5, 2010. All interviews were conducted by telephone at their places of business. One respondent per business was contacted. The margin of error is ± 2.3 percentage points at the 95% confidence level. Interviews were monitored at random. Sampling for this study was conducted using a national sample of businesses drawn from InfoUSA. All interviews were conducted using a computer assisted telephone interviewing system. Statistical weights were designed from the United States Department of Commerce to ensure proper inclusion of all SIC codes.
About Capital One
Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A. and Capital One Bank (USA), N. A., had $119.2 billion in deposits and $196.9 billion in total assets outstanding as of September 30, 2010. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients. Capital One, N.A. has approximately 1,000 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia, and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.
Capital One Small Business offers a range of products and services to meet small business needs, including small business credit cards, loans and lines of credit; business checking, money market and savings accounts; and payroll and merchant services. Capital One has a team of bankers committed to deepening our relationships with small business owners and helping them achieve their financial goals.
SOURCE: Capital One Financial Corporation
Capital One Financial Corporation
Steve Schooff, 212-216-8984