Beyond the optimistic predictions of the Federal Reserve or Keynesian economists, there has been skepticism among small businesses and start ups about the health of the economy. This seems to have changed however, as recent polls conducted by the Ewing Marion Kauffman Foundation and LegalZoom show a greater degree of confidence among start ups.
The report, which measured confidence levels among young entrepreneurs, showed an across-the-board increase in the belief that economic conditions are improving. The report noted that “Eighteen- to 30-year-olds and 31- to 40-year-olds expressed 97 percent and 95 percent confidence levels, respectively. This is an increase of 3 percentage points from last quarter for the 18- to 30-year-olds.” Moreover, a majority of entrepreneurs polled felt that the economy would either improve or remain at its current level of health. “Eighty-two percent are confident the economy will improve or stay the same in the next 12 months, an increase of 3 percentage points over the fourth-quarter survey,” noted the Kauffman report.
“It’s encouraging to see founders of new startups have this level of high confidence for twelve months straight. Perspective is everything. We need new firm creation to grow our economy, but people aren’t going to start companies if they don’t feel good about their business prospects.”said Dane Stangler, vice president of Research and Policy at the Kauffman Foundation.
The report also attempted to highlight one of the most prominent concerns facing small businesses: consumer demand. According to the report, “Anticipation of growing consumer demand remained constant, with 55 percent of entrepreneurs saying they believe consumer demand will increase moderately or significantly in the next 12 months, which matches the highest number in any of the 2013 surveys.” Of those polled, 46% of the respondents anticipated moderate growth ahead.
The most recent report prepared by the Kauffman Foundation and Legal Zoom reflects a growing attitude among young entrepreneurs that there is the potential for successful ventures in the current economy, provided that adequate funding is available. Reports from the Bureau of Labor Statistics and the Small Business Administration seem to suggest that the unemployment rates across major cities are slowly declining, and that productivity and wages are slowing increasing.
In an earlier report, it was mentioned that the Kauffman Foundation acknowledges that credit seems to be the central issue facing the growth of many small businesses. “When asked to report if they applied for and obtained loans or lines of credit and the reasons why these applications were not filed or were denied, access to credit still seems to be an issue for many firms,” the Kauffman executive report on small businesses states.
Unlike traditional bank lines of credit, that focus on a credit score, factoring focuses on receivables from customers and their ability to pay. Where lines of credit may be denied to companies with high growth curves, factoring is a great option, based on a company’s customer base.
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