Newest Small Business Owner Survey Points to Continued Economic Weakness

LOS ANGELES, CA--(Marketwire - Dec 6, 2012) -  U.S. small business owners continue to see weakness in the economic landscape and remain hesitant to make key business decisions heading into the final quarter of 2012, according to the most recent Private Capital Access Index (PCA), a quarterly private capital markets data survey released today by Pepperdine University's Graziadio School of Business and Management, based on a survey conducted in partnership with Dun & Bradstreet Credibility Corp. Set against a backdrop of post-election initiatives and negotiations to avoid the "fiscal cliff," responses by business owners indicate downward trending demand for new financing, plans for future revenue growth, and hiring.

"These most recent PCA results suggest that businesses and lending institutions alike see clouds on the economic horizon, with responses trending in a way that points to general economic weakness," said Dr. John Paglia, director of the Pepperdine Private Capital Markets Project and associate professor of finance at Pepperdine University's Graziadio School of Business and Management. "Our index data indicate that business owners are very cautious right now, and that their demand for financing, plans for growth, and expected hiring are all down."

"Both small business owners and financial institutions seem to be looking at the landscape and feeling better times are just too far in the future to be supportive of plans for growth," said Jeffrey Stibel, Chairman and CEO of D&B Credibility. "Until they have a greater sense of certainty about what to expect in terms of economic conditions, the economy may have to wait to get the jumpstart it needs."

As analyzed at the end of Q3, the following are the key trends in the private capital markets pertaining to the financing needs of small and medium-sized businesses, the accessibility of private capital, and the transparency and efficiency of private financing markets:

• Access to capital has remained relatively stable from Q1 through Q3, but demand (by both lower-revenue and mid-cap businesses) for capital has gone down slightly from Q1 to Q3;
• Businesses have lowered their forecasted annual growth estimates considerably -- from 7.8 percent in Q2 to 6.7 percent in Q3;
• Bank loans success rates have declined from 45 percent in Q1 to 42 percent in Q3;
• Growth or expansion are less likely to be the reason for businesses to seek financing in Q3;
• Expected demand for financing in the next 6 months declined across all categories -- including planned future growth and expansion -- from Q1 to Q3;
• Businesses that do expect to tap capital markets expect to contact 4.8 different types of capital sources and lenders to accomplish their funding needs;
• Plans to hire additional employees went down from Q1 to Q3.

The Private Capital Access (PCA) Index Report is the second of a series of quarterly indicators that will continuously gauge the demand for financing of small and medium-sized privately-held businesses, the level of accessibility of private capital and loans; and the health of private financing markets.

Download the full report: http://bschool.pepperdine.edu/accesscapital

About the Pepperdine Private Capital Access Index

In an effort to measure the demand for activity and health of the privately-held businesses on a quarterly basis, Pepperdine University's Graziadio School of Business and Management and Dun & Bradstreet Credibility Corp. recently launched the Pepperdine Private Capital Access (PCA) and Private Capital Demand (PCD) Index. The Q2 index survey results were generated from responses of 4,686 business owners collected from July 10 to August 3, 2012. Businesses involved in services accounted for 28% of respondents followed by retail trade (11%), construction (11%) and manufacturing (9%). Approximately 58% of respondents have less than or equal to $1 million in revenues, followed by 20% reporting between $1 million and $5 million. Thirty-nine (39%) of respondents have businesses that are older than 20 years. Approximately 56% of respondents have less than or equal to five employees.

About Pepperdine University Graziadio School of Business and Management

Founded on the core values of integrity, stewardship, courage, and compassion, Pepperdine University's Graziadio (GRAT-ZEE-ah-DEE-oh) School of Business and Management has been developing values-centered leaders and advancing responsible business practice since 1969. Student-focused, experience-driven, and globally-oriented, the Graziadio School offers fully accredited MBA, Masters of Science, and bachelor's completion business programs. More information found at http://bschool.pepperdine.edu/newsroom/.  

About Dun & Bradstreet Credibility Corp.
Dun & Bradstreet Credibility Corp. is the leading provider of business credit building and credibility solutions for businesses. The company helps businesses establish their credit with a D&B D-U-N-S® Number and provides the only business credit solution available to businesses looking to build, monitor, and impact their business credit and credibility. The company's headquarters are in Los Angeles, CA with offices throughout the United States. For more information on the company, please visit www.DandB.com. Twitter: @DandB