Small Business Index Shows Confidence Eroded In January

According to the National Federation of Independent Businesses, small business owners’ confidence in the economy and in their businesses dropped to the second-lowest level ever recorded by the NFIB in the organization’s 35-year history. The NFIB’s Small Business Optimism Index fell to 84.1, from 85.2 in December 2008.

The organization remains hopeful that signs of recovery will begin to appear in the second half of 2009, but acknowledges that any recovery is unlikely to begin through the second quarter of the year. In addition to the glum outlook for businesses, small business owners reported a significant decline in average employment in January, though capital expenditures remained steady in January, after falling five points in December. Nearly 60 percent of respondents reported a drop in profits in January.

The NFIB says that the number of deferred expenditure plans rose two points, but reports that owners aren’t making big plans to build inventories, and 20 percent fewer businesses expect to see their sales rise, an overall drop of 2 points. The outlook for expected credit conditions was largely negative, dropping fourteen percent from January. Four percent of respondents indicated that credit and financing are their single most important problems right now. Thirteen percent of respondents say that loans are harder to get now than in the past, and demand for loans is at a low.

The drop in loans could signal tough times ahead for some small businesses. Combined with tightened lending restrictions, some small businesses that would normally borrow to get through rough spots aren’t able to get the operating capital they need to stay afloat.

For some businesses, an alternative to a loan is a merchant cash advance. A merchant cash advance can put the cash you need in your hands right away, without the weeks or sometimes months of waiting that can accompany a traditional loan. Even businesses with less-than-perfect credit can qualify.

A merchant cash advance isn’t like a loan. Instead, it’s a cash advance on your future Visa and MasterCard credit transactions. Your cash advance is repaid as you take in new transactions. Nothing could be easier! Most advances are delivered in less than seven business days, and you can request an advance of up to 1.5 times your normal monthly credit card receipts. There are no restrictions on how the cash is used, and 95% of all applicants are approved for the advance.

If you need cash to keep your business moving, turn to a name you can trust: Rapid Capital Funding.

Source: NFIB
Photo Credit: Ben Earwicker

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