Mid-Sized Businesses Show Sharp Increase in Capital Access; Optimism and Financing Success at Highest Level Since 2012
LOS ANGELES, July 16, 2015 /PRNewswire/ -- Mid-sized businesses in the U.S. ($5-100 million in revenue) are increasingly able to access capital and are generally more optimistic than any other time in the last three years, according to results of the latest Dun & Bradstreet (NYSE: DNB) and Pepperdine Private Capital Access (PCA) Index.
Overall, access to capital is up 8.6% since the study began in Q2 2012. At the same time, mid-sized businesses seem increasingly optimistic about their ability to secure funding. Findings show a 19% drop since 2012 in the number of mid-sized businesses that believe equity financing is "difficult to raise."
"Record access to capital for mid-sized businesses is a positive sign for the economy as well as for the estimated 30 million Americans who work for these businesses," said Jeff Stibel, Vice Chairman of Dun & Bradstreet. "The fact that mid-sized companies are reporting greater success and optimism is a strong indication that smaller businesses have joined their larger peers in the economic recovery."
Additionally, mid-sized businesses are outpacing their small business counterparts in success rates in qualifying for bank loans (a 44.8% divide in Q2 2015, up from 39.7% in Q2 2012), with 76.3% of mid-sized businesses successfully qualifying for a bank loan for Q2 2015 compared to 31.5% for small businesses.
Mid-sized businesses are also seeing an increase in equity options as an alternative to bank lending. The PCA Index shows mid-sized businesses are reporting increases in the following in comparison to 2012:
- 42% increase in businesses seeking Private Equity financing
- 40% increase in businesses seeking Hedge Fund investment
- 26% increase in businesses seeking Angel funding
"Mid-sized businesses are the growth generators for the U.S. economy in terms of expansion and higher-wage job creation," said Dr. Craig R. Everett, Director of the Pepperdine Private Capital Markets Project. "One bright spot is that, looking ahead, businesses may benefit from the new rules that permit raising funds from investors stemming from the 2012 Jumpstart Our Business Startups Act, or JOBS Act."
Under the new JOBS Act rules, entrepreneurs and businesses of all sizes can raise up to $50 million in "Reg A+" capital from investors. The new rules, which went into effect on June 12th, 2015, are particularly appealing because they enable businesses to curtail legal costs and financial reporting requirements. The rules are specifically aimed to help small businesses expand and create jobs.
The results are part of Pepperdine Private Capital Access (PCA) Q2 2015 Index report, a private capital markets data survey produced quarterly by Pepperdine University's Graziadio School of Business and Management, in partnership with Dun & Bradstreet.
The Q2 2015 Index report is derived from 3,693 completed responses collected from April 6 – April 24, 2015 and contrasted with survey results collected from Q2 2012. Download the latest index data at http://bschool.pepperdine.edu/accesscapital and follow us on Twitter at @GraziadioSchool and @DandB.
About Dun & Bradstreet
Dun & Bradstreet (NYSE: DNB) grows the most valuable relationships in business. By uncovering truth and meaning from data, we connect customers with the prospects, suppliers, clients and partners that matter most, and have since 1841. Nearly ninety percent of the Fortune 500, and companies of every size around the world, rely on our data, insights and analytics. For more about Dun & Bradstreet, visit DNB.com. Twitter:@DnBUS
About Pepperdine University Graziadio School of Business and Management
A leader in cultivating entrepreneurship and digital innovation, the Pepperdine Graziadio School of Business and Management focuses on the real-world application of MBA-level business concepts. The Graziadio School provides student-focused, globally-oriented education through part-time, full-time, and Executive MBA programs at our 5+ Southern California campuses, Northern California campus, as well as through online and hybrid formats. In addition, The Graziadio School offers a variety of Master of Science programs, a Bachelor of Science in Management degree completion program, and Presidential and Key Executives MBA and executive education certificate programs. Follow the Graziadio School on Facebook , Twitter, and LinkedIn.
Dun & Bradstreet
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For Pepperdine University's Graziadio School
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SOURCE Dun & Bradstreet
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