On its own, saying that small businesses need capital is not news. However, saying that the rate of small businesses accessing capital has hit a three-year high holds some serious weight.
The Q2 2015 Dun & Bradstreet and Pepperdine Private Capital Access (PCA) Index shows, “The rates at which small businesses are requesting and accepting capital have steadily increased, hitting the highest levels since 2012.” But even since the previous quarter, small businesses’ need for capital has increased by an astounding 9.1%.
At Direct Capital, we always want to learn more about our customers’ business needs so we can better tailor our products to their sales goals. This report explained why the 3,693 business owner respondents sought external financing. The table below gives a brief snapshot of their financing demands.
For the financing industry as a whole, it’s also important to understand general satisfaction rates of customers accessing that financing. Where are areas for improvement? The respondents, overall, were extremely pleased with the speed and general process.
To show just a quick snapshot, we chose to focus on satisfaction rates of lease and loans, since those are the main facets of our business.
- Percentage satisfied with pricing and contract terms:
- Lease: 83% (up 5% since Q2 2012)
- Business bank loan: 87% (up 5% since Q2 2012)
- Percentage satisfied with the general process:
- Lease: 85% (up 6% since Q2 2012)
- Business bank loan: 85% (up 14% since Q2 2012)
- Percentage satisfied with the time elapsed from point of first contact until funded:
- Lease: 86% (up 4% since Q2 2012)
- Business bank loan: 80% (up 9% since Q2 2012)
The PCA Index also helps financial institutions plan for the future. Are businesses planning on accessing capital in the coming months? For what purpose? How can you make sure they are getting exactly what they need?
The report showed 33% of businesses are planning to access capital in the next six months, the highest future forecasting since Q2 of 2012. And of that 33%, 60% said their main purpose for that expected financing is to grow and expand their business.
Since Direct Capital is here to help businesses across the company grow and expand, we’re excited to see what the future brings.
For more information on this report, visit the Pepperdine University Graziadio School of Business and Management website. And, for more on Direct Capital and how our financing solutions can help your small business, visit our website.