Things are looking up … sort of
Small business owners say they’re more confident about the economy, but they’re still plagued by worries about paying their bills and slumping cash flow, new research from Discover Financial Services shows.
Their optimism is a bit of a head-scratcher, especially considering the slew of discouraging news the survey uncovers. Some highlights:
* nearly 70 percent of small biz owners say their take-home pay has taken a hit in recent months.
* more than half say they’ve held off on bill payment because of cash flow issues in the past 3 months.
* almost 60 percent rate the economy as “poor”, and half of them said it was getting worse.
So why the optimism?
Ryan Scully, director of Discover’s business credit card, offers some context. For starters, he says the uptick in the confidence level is incremental (and a long way off its high way back in March 2007). And although only about a third of business owners think the economy is getting better, that’s up significantly from 16 percent in March.
“So we can’t say exactly what is fueling their confidence, but not all of the news they’ve been hearing is bad,” Scully told Reuters.
Interestingly, the survey found that business owners are shying away from traditional borrowing practices such as applying for a loan or getting a line of credit, possibly in favor of funding from friends and family, Scully said.
Are you more confident about the state of the economy than you were six months ago, or do you think the worst is yet to come? Tell us what you think below.