My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.


Credit Crunch Easing for Small Businesses

Credit Crunch Easing for Small Businesses
Image credit: Shutterstock
min read
Opinions expressed by Entrepreneur contributors are their own.

There may be good news on the horizon for small-business owners in need of loans. A new survey suggests the credit crunch for small businesses may be easing.

Sixteen percent of small-business owners applied for loans or lines of credit in the last year, unchanged from the previous quarter. But of those applicants, 14 percent more had their loans approved than in the previous quarter, according to the fourth-quarter Kauffman/LegalZoom Startup Confidence Index, published Thursday.

"This is a really good sign that credit could be on the rise. That really was a major drag on the economy over the last four years," says Dane Stangler, Kauffman's director of research and policy.

Meanwhile, entrepreneurs continue to take a-glass-is-half-full approach to their profits rising over the next 12 months, even as doubts about the economy's health persist.

Eighty-three percent of startup business owners are confident that their profits will go up within the next 12 months, according to the Kauffman/LegalZoom survey.

Related: Finally, Access to Capital Improving for Small Businesses

This represents a 4 percent rise from the previous survey, conducted in July 2012, and was the highest confidence level expressed by entrepreneurs this year. The survey includes responses from 693 business owners nationwide.

"There is never a bad time to start a business," Stangler says. "There are always problems to solve. There are always opportunities to capitalize on."

Forty-one percent of entrepreneurs reported being very confident in future profitability in the fourth-quarter survey, compared to 39 percent in the third quarter. The number of respondents who were somewhat confident in future profitability rose from 40 percent in the third quarter to 42 percent in the fourth-quarter survey.

Small business owners' expectations for the U.S. economy rebounded from the July 2012 quarterly survey, but it's unclear whether this is a sustainable trend. Concerns about the economy's health continue to fester, particularly as the end of the year approaches. Many people are concerned about the so-called "fiscal cliff" -- the conundrum the U.S.government will face on January 1 when various tax increases and spending cuts kick in -- and the potential it has to drive the fragile U.S. economy back into a recession.

Related: Getting the Big Banks Back into Small-Business Lending

Still for now, 44 percent of startup owners believe the economy will improve over the next 12 months, compared with 32 percent in the third-quarter survey, 38 percent in the second-quarter survey and 38 percent in the first-quarter survey. 

What's more, startups are expecting hiring to increase over the next 12 months, with nearly 40 percent of business owners saying they plan to hire additional employees. This is the highest percentage reported in 2012.

More from Entrepreneur

Learn to be a better leader and develop successful marketing and branding strategies with Dr. Patti Fletcher's help.
Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level.
Starting, buying, or growing your small business shouldn’t be hard. Guidant Financial works to make financing easy for current and aspiring small business owners by providing custom funding solutions, financing education, and more.

Latest on Entrepreneur