Capital One Bank Survey Reveals Most Small Businesses See Economic Conditions as Holding Steady
National Results Suggest Small Businesses are Concerned about Winning New Customers to Grow their Business
McLean, Va. (April 6, 2010) – Capital One Small Business Banking today released the results of a recent survey of small businesses across the nation gauging their current financial condition and business projections for the next six months. The results showed that while nearly half (47 percent) of the small businesses surveyed said that the economic conditions for their companies have stayed the same, one in four (26 percent) of the business owners reported improving conditions and nearly one third (28 percent) said that their firm’s financial position is better than it was at the same time last year.
“At the onset of the economic recession, small businesses across the country were among the most heavily impacted by the downturn. However, the results of our survey suggest that we’re starting to see a leveling-off effect,” said Robert M. Kottler, Executive Vice President of Small Business Banking at Capital One. “Financial conditions for many small businesses have remained relatively constant over the past year. The lack of further deterioration and a growing access to capital are reasons to be cautiously optimistic as we look ahead.”
Asked about access to capital, more than two-thirds (78 percent) of those surveyed believed they had access to the credit and financing they need. Nevertheless, most of the small businesses surveyed said they have no plans to make major investments in their companies in the next six months. Most remained cautious about the prospect of hiring new employees, with only 28 percent reporting any plans to hire and expand their workforce and 46 percent saying they don’t plan to make any additional investments or expenditures – including spending on marketing, IT and new hires – over the next six months.
Although many small business owners across the country have seen improvements, they continue to face a variety of challenges. The ability to acquire new customers is the biggest challenge facing small businesses over the next 6 months according to 58 percent of survey respondents. Additionally, nearly 37 percent of respondents feel the ability to maintain existing customers will be the biggest challenge, while 25 percent believe identifying new revenue streams will be their greatest obstacle to overcome in the months ahead. The Obama Administration’s efforts to increase lending are drawing even more attention to the need for small business recovery. And while there are regional differences of opinion and variances in survey results, small businesses everywhere appear to be cautiously optimistic about the economy and the state of the small business sector.
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 1,611 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 and Texas. Small businesses are defined as those with less than $10 million in annual revenue. The interviews were conducted between December 28, 2009 and January 13, 2010. All interviews were conducted by telephone at their places of business. One respondent per business was contacted. The margin of error is ± 4.38 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 $115.8 billion in deposits and $212.0 billion in total managed assets outstanding as of December 31, 2009. 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, business money markets and payroll services on a national basis, in addition to loans and lines of credit; business checking, money market and savings accounts; and payroll and merchant services offered in our branches. Capital One has a team of bankers committed to deepening our relationships with small business owners and helping them achieve their financial goals.
Contact: Pam Girardo 703.720.2351