Barlow Research Finds That Small Business Applications for Additional Credit Began to Rebound After Four Quarters of Limited Demand

MINNEAPOLIS--()--Although small businesses and middle market companies were not as optimistic as they were in the beginning of 2014, the fourth quarter metrics alone may not be indicative of the true state of small business and middle market economic confidence. The fourth quarter 2014 Economic Pulse Survey explores business confidence, credit appetite and expectations for excess cash reserves.

Decreases in the net differences of prices and increases in profits suggest that small businesses and middle market companies may have adjusted prices to remain profitable. Looking toward the next 12 months, small businesses and middle market companies were not as optimistic about the future condition of their company as they were earlier in 2014. Even with this decreased confidence in the latter part of 2014, the overall trend for small business and middle market confidence continues to improve, growing more optimistic year-over-year.

“Although optimistic, when there are few expectations to increase prices and not high expectations for sales, we can’t expect much in terms of capital expenditures,” says Ray Johns, Managing Partner, Barlow Research.

Small business applications for additional credit rebounded to similar levels seen in 2012 and most of 2013, while middle market applications for additional credit remained stable. Small business approvals for additional credit increased and the percentage of small businesses that have no current need/do not borrow decreased in the fourth quarter 2014.

Other important results from the fourth quarter 2014 Economic Pulse report:

  • The business banking segment ($2.5MM-<$10MM) appears to be most confident.
  • Nearly the same percentage of small businesses and middle market companies expected to need additional credit or are not sure of their need (33% and 35%, respectively).
  • Most small businesses and middle market companies anticipate having cash reserves over the next 12 months.

About Barlow Research Associates, Inc.:

Barlow Research Associates, Inc., founded in 1980, provides research and consulting services to the banking industry in the U.S. and overseas with specialties in custom research, strategic consulting and syndicated research programs for small business, middle market and digital banking.

Contacts

Barlow Research Associates, Inc.
Bernie Kuechler, 763-253-1830
Director of Data Analytics
bkuechler@barlowresearch.com

Release Summary

Barlow Research finds that small business applications for additional credit began to rebound after four quarters of limited demand.

Contacts

Barlow Research Associates, Inc.
Bernie Kuechler, 763-253-1830
Director of Data Analytics
bkuechler@barlowresearch.com