MINNEAPOLIS--(BUSINESS WIRE)--Small businesses ($100K-<$10MM in annual sales volume) and middle market companies ($10MM-<$500MM in annual sales volume) grew increasing optimistic in July, making up substantial ground from deflated confidence in the second quarter. Barlow Research’s latest Economic Pulse study, conducted from July 2 to July 18, 2020 finds business optimism about their future financial condition has rebounded to near pre-COVID-19 levels.
In the second quarter of 2020, businesses’ expectations about their financial condition over the next 12 months decreased to its lowest level since the financial crisis. This measurement was collected in early April when uncertainty was near its peak. By the beginning of the third quarter, states have lifted many of their restrictions and businesses saw customer demand slowly returning. As a result, nearly half of businesses expect increased sales, bolstering optimism about the future.
The Paycheck Protection Program (PPP) has also likely contributed to a stronger sense of stability in the third quarter. The PPP provided relief to 41% of small businesses and 68% of middle market companies. Two segments of businesses were particularly heavy PPP users; 74% of businesses with $2.5MM-<$10MM in annual sales and 72% of businesses with $10MM-<$50MM in annual sales applied for PPP loans. This much-needed relief all but dried up demand for any other non-PPP loans at financial institutions. In total, 93% of small business applications and 94% of middle market applications for additional credit in the third quarter were for government relief programs.
Barlow Research’s Third Quarter Economic Pulse results are based on data collected from 931 U.S.-based financial decision makers. Barlow Research has proudly provided the voice of the business customer to the financial services industry for over 40 years. During these unprecedented times we will continue to provide current information to support our clients and the U.S. companies they serve.
Barlow Research’s COVID-19: Leading Business Banking Customers to Recovery research series is available for purchase. For information about this series or Barlow Research’s Economic Pulse, contact: Sales@BarlowResearch.com