One day ahead of President Barack Obama's much anticipated jobs speech, nearly half of small businesses (40.7 percent) say they will hire employees in the next six months, according to new research. The challenge, for many, is getting access to bank loans to finance the growth of their payrolls.
The poll of 7,502 small businesses with revenues of less than $5 million conducted by Pepperdine University's Graziadio School of Business and Management, also found that economic uncertainty (38.2 percent), followed by access to capital (26 percent), and government regulations and taxes (24.2 percent) are the top three issues small businesses face today.
"Small businesses should be a top consideration as the president and other legislators seek to jump-start job creation," said John Paglia, lead researcher of the Pepperdine Private Capital Markets Project and associate professor of finance at Pepperdine University’s Graziadio School of Business and Management. "Establishing market confidence, improving access to capital and improving regulatory and tax structures are the most direct route to end the Great Recession and spark the Great Recovery."
More than a third of those surveyed said that increased access to capital would be the biggest help in encouraging them to hire new employees . Tax incentives were named by 23.2 percent of the group and regulatory reform was named by 18.3 percent of survey respondents.
Small business owners said banks were their first choice for finding financing, but only 44.5 percent of those who tried to get a bank loan in the last year said they were successful.
"Many businesses are now questioning whether contacting banks for credit is worth the time invested. Taking 16 to 24 hours away from 'minding the store' to pursue a loan can be extremely detrimental to any small business, especially when the odds are not in their favor," said Paglia. "If we can get credit flowing and hiring picks up, actions such as incentives that support the pursuit of advanced degrees and work force retraining would set off further creation of much needed, higher-wage jobs."
The study showed that of those that do plan to hire, sales and marketing skills are in greatest demand (47.8 percent) followed by skilled labor (41.6 percent) and service/customer service (38.8 percent).
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