BELLEVUE, Wash., Jan. 18, 2018 /PRNewswire/ -- Small business owners are approaching 2018 with economic optimism and confidence, according to a survey from small business financing company Guidant Financial and online credit marketplace LendingClub Corporation (NYSE: LC). The companies surveyed more than 2,600 small business owners and aspiring entrepreneurs about reasons for going into business, challenges they face and views on the current state of small business in the country.
Guidant Financial and LendingClub collected data from its small business customers in all 50 states. Data showed that "ready to be my own boss" ranked as the top reason respondents pursued business ownership in 2017, unseating the top reason "dissatisfaction with corporate America" from 2016. While the data shows that today's small business owner is still 72 percent male, 2017 saw an 18 percent increase in female-owned businesses.
Overall, business optimism is up. According to the survey, 63 percent of small business owners ranked satisfaction in today's political climate a seven or above on a scale of 1-10. Only 37 percent ranked it a six or below. What's more, 75 percent of all business owners rated their happiness level as an eight or above.
The survey also included those who have not yet started a business, but hope to. Similar to current small business owners, 55 percent of aspiring entrepreneurs feel confident about the state of small business, rating their confidence at an eight or above on a scale of 1-10. The biggest hurdles among those looking to start a business are the inability to find funding, not identifying the right opportunity, and not being sure where to begin. More than half do not have cash for a down payment and 41 percent reported a lack of knowledge about financing opportunities as challenges to obtaining funding.
The survey also yielded valuable trend information on the U.S. small business economy.
- Demographics – 33 percent of respondents are in their fifties, followed by 27 percent in their forties, 17 percent in their sixties, 15 percent in their thirties, 4 percent between 18-29 and 4 percent at age 70 or above.
- Ethnicity – Minorities accounted for 47 percent of aspiring entrepreneurs surveyed.
- Geography – California topped the list in terms of the highest volume of entrepreneurs, followed by Florida and Texas. In years past, Texas held the No. 2 spot.
- Education – A college degree isn't required. In fact, 34 percent of respondents hold an HSD/GED.
- Financing Method – Cash, friends and family and 401k business financing such as Rollovers as Business Startups (ROBS) are the most popular financing methods among respondents.
While lack of capital/cash flow remains a top challenge for small business owners, 68 percent report that their business is currently profitable.
"From a small business perspective, we saw increased economic optimism and confidence in 2017, and more entrepreneurs taking the plunge to start a business," said David Nilssen, CEO of Guidant Financial. "Tax reform and economic growth stand to benefit many small business owners in 2018, especially those forming C-corporations. As a result, we expect business ownership to continue to increase."
"The survey results highlighted how people from all walks of life are choosing to go into business for themselves, and it's amazing to see that this diversity continues to grow," said John Spottiswood, General Manager of LendingClub Business Loans. "This variety of experiences and thinking are exactly what make small businesses a prime place for innovation. As emerging technologies continue to disrupt various industries in 2018, small business owners are well suited to face these challenges and thrive."
Guidant Financial and LendingClub are small business financing experts committed to making access to capital seamless. Together, they've provided access to nearly $4.5 billion to thousands of new business owners.
An accompanying infographic can be found here.
Between November 28, 2017 and December 1, 2017, Guidant Financial and LendingClub conducted an email survey of more than 2,600 male and female small business owners and aspiring entrepreneurs from the continental U.S., Alaska, and Hawaii. Ages of respondents ranged from 18 to over 70.
About Guidant Financial
Guidant Financial helps business owners secure financing to start, buy or grow a business. An industry leader in innovative business and franchise financing, Guidant works with new and existing entrepreneurs to identify, evaluate and deploy customized financing solutions. Their services include, but are not limited to, 401(k) business funding, SBA loans, unsecured credit and portfolio loans. Visit Guidant on the web at guidantfinancial.com.
LendingClub was founded to transform the banking system to make credit more affordable and investing more rewarding. Today, LendingClub's online credit marketplace connects borrowers and investors to deliver more efficient and affordable access to credit. LendingClub's technology platform creates cost efficiencies, which are passed onto borrowers as savings in the form of lower rates and to investors in the form of solid returns. LendingClub is based in San Francisco, California. Loans made by WebBank, member FDIC.
Mary Catherine Citarelli
SOURCE Guidant Financial