Businesses Also Show Signs of Optimism Despite Fuel, Housing Concerns
MINNEAPOLIS--(BUSINESS WIRE)--July 9, 2008--Nearly three-quarters
(74 percent) of Minnesota small business owners believe the economy is
in a recession, and nearly half (46 percent) report lower revenues
this year compared to 2007, according to the U.S. Bank Small Business
Survey in Minnesota conducted statewide in June.
Despite this, most Minnesota small business owners (78 percent)
also say that the availability of loans or credit has had a positive
or no impact on their businesses. Among those small business owners
who indicated they wanted to access credit for their businesses, 73
percent characterized the securing of loans as "easy" or "very easy,"
with 27 percent saying it was "difficult." Similarly, 73 percent say
that interest rates have had a positive or no impact on their
"Even though the Federal Reserve would technically say we are not
in recession, Minnesota's small business owners are saying we indeed
are," said Rick Hartnack, vice chairman of U.S. Bancorp. "Even so,
they are also confirming what we at U.S. Bank have been seeing for
some time - there is no credit crunch for small businesses, which is
good news for Minnesota."
When asked to describe the current economic conditions for small
businesses in Minnesota, only 21 percent said conditions were
"excellent" or "good" (3 percent and 18 percent, respectively), while
39 percent said they were "fair" and 38 percent said "poor."
Not surprisingly, fuel prices have had a measurable effect on
small businesses, with 85 percent of business owners indicating that
gas prices have had a negative impact on their small businesses with
nearly two-thirds of respondents saying the impact has been "very
negative." After fuel prices, the second most unfavorable economic
factors for small business owners were state and local taxes (listed
as negative by 48 percent of respondents), federal taxes (41 percent)
and the housing market (40 percent). "Gasoline prices, food prices.
The market is just terrible," noted one business owner.
Among the nine economic factors that business owners ranked for
their impact, the two factors that stood out as the most positive were
interest rates and the availability of credit. Twenty-four percent of
business owners felt that interest rates were a benefit of the current
economy while 18 percent thought the availability of loans and credit
were economic bright spots. Only five percent characterized the
availability of loans as having a "very negative" impact.
"The media attention about tight credit in the housing market
simply doesn't translate to the business market," said Hartnack.
"Minnesota small business owners are savvy and know there are a range
of credit options available to them, from direct loans to business
credit cards and federal loans."
Great rates for those in need
Drilling deeper into the survey data also shows that the small
business owners who said they need credit or loans were satisfied with
the current market. Thirty-three percent of respondents who said they
need credit for their business felt positive about current interest
rates. Thirty-six percent of business owners who indicated they found
it easy to borrow money also listed interest rates as a positive
Twin Cities-based small businesses tended to report easier access
to credit than businesses in the rest of the state. Some 37 percent of
Twin Cities-based small businesses indicated access to credit was
"easy" compared 26 percent for businesses in the rest of the state.
Businesses in operation for 15 years or more were also more likely to
report credit as "very easy" to obtain compared to those in business
less than 15 years (20 percent and 13 percent, respectively).
Business owners also were guardedly optimistic that overall
economic conditions will improve next year, with 50 percent of those
reporting lower revenues in 2008 as in 2007 saying they expect their
revenues to maintain or improve in 2009.
U.S. Bank has 71,116 small business customers in Minnesota, and
has added 1,690 new small business customers in the state in just the
last year. The growth is thanks in large part to a renewed focus on
small businesses through U.S. Bank's PowerBank program, which added
small business loan officers and operations capacity in the Twin
Cities metropolitan area. Over the past 12 months, U.S. Bank has
loaned more than $161 million in new money to Minnesota small
businesses, a number that continues to grow. Additionally, figures
released by the Minnesota office of the U.S. Small Business
Administration (SBA) shows that as of June 30, 2008, U.S. Bank
continues to be the number one SBA lender in the state, with 293 loans
The telephone survey of 401 small businesses with annual revenues
less than $10 million was conducted by KRC Research between June
10-19, 2008. The estimated margin of error at the 95 percent
confidence level for proportions near 50 percent was +/-4.9 percent.
Additional information on the statewide survey is available upon
About U.S. Bank
With $242 billion in assets, U.S. Bancorp (NYSE: USB) is the
parent company of U.S. Bank, the 6th largest commercial bank in the
United States. The company operates 2,522 banking offices and 4,844
ATMs, and provides a comprehensive line of banking, brokerage,
insurance, investment, mortgage, trust and payment services products
to consumers, businesses and institutions. In Minnesota, U.S. Bank
operates 127 bank branches and 570 ATMs, has 10,098 employees and
maintains a 15.4 percent market share in the state. Visit U.S. Bancorp
on the web at www.usbank.com.
CONTACT: U.S. Bank Media Relations
Steve Dale, 612-303-0784
Nora Hayes, 952-346-6164
SOURCE: U.S. Bank