Seven in 10 feel they are well positioned to borrow, with equipment financing being their top need.
WILMINGTON, Del., Nov. 17, 2022 (GLOBE NEWSWIRE) -- Mid-Atlantic small businesses are optimistic in their ability to keep revenues at their current pace or even increase them in the next year despite economic woes and strains on their costs, a new WSFS Bank Small Business Trends study found.
The study, which surveyed 500 Mid-Atlantic small businesses, measured owner/operators’ outlook on the economy, the impact of inflation and other stressors on their businesses, and their banking relationships and lending needs.
Optimism for Their Business’ Future
Overall, 83% of small business owners and leaders believe revenue will improve or stay the same within the next 12 months. Of those, more than half (54%) expect improvement.
However, the same cannot be said for their confidence in the economy over the next six months, as 43% feel the Mid-Atlantic economy will improve and only 34% feel the same about the national economy.
Despite this lack of confidence in the economy and numerous setbacks—including rising costs for materials and gas—for their businesses, 76% are optimistic their business will still be operating in 12 months, with 69% feeling prepared to “weather another storm.”
Inflation, Operations and Health
Setbacks to their businesses experienced over the past two years remain significant obstacles to success, however.
Sixty-one percent felt negative impacts of the pandemic, with 48% having employees and/or family contracting COVID-19 causing stress on the business. More than half (52%) cited rising inflation having a negative impact. Increased costs for materials and operations have affected 54% of small businesses surveyed, and nearly four in 10 (38%) are feeling the crunch of gas prices, too.
“While it is encouraging to see overall optimism among small businesses, the impacts of rising business costs, coupled with health issues in an environment where it is difficult to find and retain workers, is concerning,” said Candice Caruso, Senior Vice President, Chief Retail Lending Officer for WSFS Bank. “These findings underscore the importance of supporting small businesses in our communities not only this holiday season, but throughout the year. Small businesses are the lifeblood to the U.S. economy and support our communities through job creation, innovation, essential services and more. When you support a local small business more of those dollars are reinvested into our local communities so that we can all thrive.”
Relationships Matter
Many small businesses leaned on their banking relationships to navigate the past year, with 54% saying their bank was extremely or very proactive, in line with their expectations. Having good relationships with their bank was often cited as the reason they can secure financing, with seven in 10 (71%) feeling confident in doing so.
“Finding a banking partner that knows the community and its history is a key differentiator in serving small businesses. Local lending decisions more effectively support the business’ growth needs as your banker knows the business’ location, competition, customer base and the communities the small business serves,” said Caruso. “These factors can go a long way in helping a business advance through access to key capital and other small business services.”
Nearly half (45%) are considering a new loan to reinvest in their business by purchasing equipment, while another quarter (26%) of small businesses would use the loan to buy property. However, more than half indicated they would use the funds to stay afloat, with 28% using the money to pay workers and 24% for covering losses.
“Relationships do matter in every aspect of running a business and having a good rapport with your banker is critical for short and long-term success,” said Caruso. “It’s exciting to see that businesses are preparing to reinvest in their future, but it is important that small business owners are clear on how they are leveraging debt to drive their bottom-line. This could be through business expansion, equipment or working capital to address inventory or staffing needs. All small business owners and leaders should consult their banker to map out a plan for the coming year, discussing important options like cash management tools that can help them operate as efficiently as possible. Predictability of cash flow is one of the key health indicators for a successful small business.”
Survey Methodology
The study was conducted by OnePoll on behalf of WSFS Bank. The sample included 500 senior managers and above at Mid-Atlantic region small businesses (annual revenues of up to $5 million and minimum two employees) in New Jersey, Delaware, Pennsylvania (east of Harrisburg), Maryland and Virginia. Respondents were surveyed from September 23 – November 1, 2022, with a margin of error of +/- 4.47 percent.
About WSFS Financial Corporation
WSFS Financial Corporation is a multi-billion dollar financial services company. Its primary subsidiary, WSFS Bank, is the oldest and largest locally-headquartered bank and trust company headquartered in Delaware and the Greater Philadelphia region. As of September 30, 2022, WSFS Financial Corporation had $20.0 billion in assets on its balance sheet and $61.4 billion in assets under management and administration. WSFS operates from 119 offices, 92 of which are banking offices, located in Pennsylvania (61), Delaware (39), New Jersey (17), Virginia (1) and Nevada (1) and provides comprehensive financial services including commercial banking, retail banking, cash management and trust and wealth management. Other subsidiaries or divisions include Arrow Land Transfer, Bryn Mawr Trust®, The Bryn Mawr Trust Company of Delaware, Cash Connect®, Cypress Capital Management, LLC, NewLane Finance®, Powdermill® Financial Solutions, West Capital Management®, WSFS Institutional Services®, WSFS Mortgage®, and WSFS Wealth® Investments. Serving the Greater Delaware Valley since 1832, WSFS Bank is one of the ten oldest banks in the United States continuously operating under the same name. For more information, please visit www.wsfsbank.com.
Media Contact: Eric Springer
(215) 864-1778
espringer@wsfsbank.com
