Survey data for the third quarter of 2010 suggest U.S. small
businesses are less optimistic about economic conditions but financial
performance remains stable
MCLEAN, Va., Nov 18, 2010 (BUSINESS WIRE) --
Capital One Small Business Banking today released the results of its
third quarter Small Business Barometer survey. The quarterly survey
polls small businesses across the nation, gauging their current
financial condition and business projections for the next six months.
Third quarter survey results suggest that many U.S. small businesses are
slightly less optimistic about the strength of the economy and their own
financial position relative to last quarter. While many small businesses
polled report that they are experiencing stable economic conditions and
steady financial performance for their businesses, a decreased
percentage believe economic conditions are improving and fewer say that
their financial position has improved since last year. Accordingly, an
increased percentage of small businesses surveyed plan to hold spending
on business development and investments at current levels rather than
increasing spending. On the hiring front, however, an increased number
of small businesses report plans to add positions over the next six
"Our survey results for the third quarter of this year suggest that
financial performance is stable for many of the small businesses we
surveyed, but some respondents have a more cautious outlook about their
growth and expectations for the broader economy and their business,"
said Robert M. Kottler, Executive Vice President of Small Business
Banking at Capital One. "It is a positive sign, however, that most small
businesses believe they have access to the credit and financing they
need and many are making plans to increase their workforce and begin
Outlook and Financial Performance
The survey results suggest that the overall economic outlook of U.S.
small businesses has continued to weaken slightly. While financial
performance remains stable for most small businesses, fewer respondents
report improved finances compared to last quarter.
In the first quarter, 39 percent of small business owners surveyed
said that economic conditions for their business were improving, but
this number dropped to 32 percent in the second quarter of this year
and 27 percent in the third quarter. Nearly half (49 percent) of small
businesses report stable conditions and one-quarter (24 percent) say
that economic conditions are getting worse.
Thirty percent of small business owners polled report that their
firm's financial position is better than it was one year ago, down
seven percentage points since last quarter. On a year-over-year basis,
however, this number is up six percentage points. About half (51
percent) of small businesses surveyed say that their firm's financial
position has held steady relative to one year ago. This number
increased 8 percentage points since last quarter. Consistent with the
last two quarters, only 18 percent of small businesses report that
their financial position has worsened compared to one year ago.
Spending and Hiring
Most U.S. small businesses polled plan to continue holding off on
additional business development and investment spending in the
near-term, but the percentage of respondents reporting plans to hire
The majority (66 percent) of small businesses say they plan to keep
business development and investment spending at current levels for the
next six months. Fewer small businesses plan to boost spending this
quarter - only 16 percent - compared to 21 percent in the second
quarter. Consistent with results from the last three quarters, 15
percent of respondents reported plans to decrease spending.
Thirty percent of small businesses polled in the third quarter plan to
add employees to the payroll over the next six months, consistent with
results from the first quarter of 2010 but 4 percentage points higher
than last quarter. Still, 63 percent of small businesses say that they
will not hire additional employees during the same period.
Availability of Financing
The survey results suggest that most small businesses continue to have
adequate access to credit and financing.
Nearly three-quarters (73 percent) of small businesses surveyed report
that they are able to access the financing they need while 22 percent
say they do not have adequate access to credit and financing.
About one-quarter (23 percent) of small businesses in the survey say
that securing the capital needed to continue operations will be one of
the biggest challenges they face over the next six months.
When asked about funding sources for financing their firm's growth,
half (52 percent) of respondents say they will seek financing from a
bank or commercial lender, consistent with past results. A slightly
increased number of respondents say they will rely on personal savings
to finance growth (40 percent compared to 35 percent last quarter).
Gulf Oil Spill
Last quarter, the Small Business Barometer survey found that there were
significant uncertainties about the potential longer-term consequences
of the Gulf oil spill. Results from the third quarter suggest that the
impact of the spill has not spread significantly and fewer respondents
believe they will be affected long-term.
To date, only 11 percent of small businesses surveyed say that their
business has decreased since the spill, the same as last quarter. Six
percent report increased business.
Only 13 percent of small business owners or managers nationally
believe the disaster will have a moderate to significant impact on
their business, down from 25 percent in the second quarter. Ten
percent say that it's too early for them to predict whether or not
their business will be affected, whereas 17 percent of respondents
were unsure about the longer-term impact last quarter.
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 1,901
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, Texas and
the Washington, D.C. metropolitan area. Small businesses are defined as
those with less than $10 million in annual revenue. The interviews were
conducted from September 14-October 5, 2010. All interviews were
conducted by telephone at their places of business. One respondent per
business was contacted. The margin of error is ± 2.3 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 $119.2 billion in
deposits and $196.9 billion in total assets outstanding as of September
30, 2010. 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, loans
and lines of credit; business checking, money market and savings
accounts; and payroll and merchant services. Capital One has a team of
bankers committed to deepening our relationships with small business
owners and helping them achieve their financial goals.
SOURCE: Capital One Financial Corporation
Capital One Financial Corporation
Steve Schooff, 212-216-8984