2012 is definitely shaping up to surpass 2011's record sales pace. Not only will the demand continue, according to the latest market surveys we expect it to increase dramatically. The latest Wells Fargo/Gallup Small Business Survey conducted in January shows that small business assessments of the US economy grew to its highest mark since before the financial crisis hit in 2008. Most importantly this renewed optimism coincides with other improved economic news, such as lower jobless claims and higher equity markets.
Strengthening revenues, both in the current and future expectations of business owners will greatly influence small business's upcoming decisions about investment, hiring and most important for us financing. While a net percent of companies reported a decrease in capital expenditures over the past 12 months, the gap has been narrowing.
Specifically, small business expecting to hire mew employees over the next year jumped from 15 percent to 22 percent, while the number of small business expecting future employment to decrease fell to its lowest rate since the 2007 recession began. FYI, our MCA client-base, businesses with less than 50 employees account for nearly half of the total expected employment!
The other factor that will drive demand is the Federal Reserve's renewed commitment to keep the cost of borrowing at record lows for all of 2012. This means almost guarantees that traditional lending will continue its severe constriction. Many expect the Fed to keep rates low through 2013 and even into 2014.
For 2012 we'll have the best of both worlds with the same supply constraints of 2011 coupled with drastically increasing demand. If you thought 2011 was a good, hold on because 2012 will be great!
As always, we look forward to funding all of your deals, and a prosperous New Year.
