Half of All Small Business Plan to Take Out a Cash Advance in 2019
In the aftermath of the Global Financial Crisis, the small business sector in the United States has grown at an unprecedented rate. A new study conducted by Raddon and PayNet now shows that almost half of all American small businesses are planning to seek financingin 2019 to spur their growth.
This is the highest level of demand for financing recorded in the last seven years, and it demonstrates a renewed optimism and confidence in positive market conditions among small business owners.
Small Businesses Are Moving On Up
The study, titled “Gimme Credit: Faster, Simpler, Safer Credit for Main Street America”, examined how small businesses access working capital, as well as the effects of additional working capital on business growth.
According to the results, with 48 percent of small business owners planning to take out working capital in the next 12 months, the demand for financing is the highest it has been since 2012. This is supported by the finding that almost two-thirds of small businesses expect to grow their sales during that same period, which is the highest level of optimism recorded in the last 14 years.
Small businesses are also increasingly confident in the economy. About 43 percent of the surveyed small business owners have expressed belief in favorable market conditions during the next 12 months.
Despite this increased optimism, many banks are reluctant to provide financing for small businesses. Still recovering from the financial crisis, they choose to play it safe and only work with larger businesses.
Funding Providers Need to Take Note
Although some may see the reluctance of banks to provide working capital as a negative thing,it represents a great opportunity for cash advance providers to step in and build a strong relationship with the small business community.
The authors of the study recommend the following three steps that funding providers of all sizes can take in order to automate their working process, speed up their decision-making, and eliminate unnecessary costs:
With so many small businesses eager to spur their growth and traditional banks unwilling to meet the unusually high demand for financing, cash advance providers stand to gain a lot in the coming months.As the small business market and the economy continue to grow, the authors of the study believe that providers who employ these three steps are likely to experience large increases in their market share.