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Four indicators of small business improvement

Van sales are an indicator of small business optimism

Things are looking up for small business, according to a variety of economic indicators released recently. Here are four pieces of good news, with caveats, published in various outlets:

1. Seed funding for startups is up. Way up, in fact, Crain's New York Business reports today: "Venture funding for companies in their very earliest stages has seen a steep increase over the past two years. Dow Jones VentureSource measured a 52 percent increase in venture-capital seed investments nationally in 2011 compared with 2010. A report last month by research firm CB Insights found that quarterly seed-stage funding for Internet companies has jumped dramatically over the past 10 quarters. In the first quarter of 2010, there were 20 seed deals; in the second quarter of 2012, there were 111, more than five times as many."

Crain's report describes two tech startups that have raised $600,000 and $2 million in seed funding, but acknowledges a downside to the trend: "The amount of money for larger financings, so-called A and B rounds, hasn't increased and won't, say investors, until the environment for IPOs improves, all of which suggests that many companies with seed money today won't be able to raise the cash to grow, expand or even survive.

2. Small business bankruptcies are down. In the second quarter of 2012, nearly 17 percent fewer small businesses filed bankruptcy than in the previous quarter, and small biz bankruptcies were down 28 percent from the same quarter last year, according to Equifax's Small Business Bankruptcy Report.

The number of total U.S. small business bankruptcies has declined for the fourth straight quarter since Q2 2011, according to Equifax. The number of small business bankruptcies filed this quarter is also the lowest for the second quarter since 2007. Still, more than 13,000 small businesses nationwide filed bankruptcy in the quarter.

3. Hiring plans are promising. The number of small businesses that plan to hire staff within the next six months is at a two-year high, DowJones Newswires reported. The data comes from a Capital One Financial Corp. survey, which also revealed that while 37 percent of small businesses plan to hire, 16 percent have open positions they are unable to find the talent to fill.

4. Deliveries are coming in new vehicles. "The Van Indicator signals a recovery on Main Street," reports Bloomberg Businessweek. According to Bloomberg Industries data, "Nearly 26,000 vans were sold in the U.S. last month. That's 6,000 more than were sold a year ago. Total van sales this year are up 17 percent from the same period in 2011 and 39 percent from two years ago." Because so many small businesses travel by van, Bloomberg considers their sales to be an indicator of small business optimism, but notes that sales might be up because access to financing has increased and some small businesses simply can't put off the purchase any longer.

Do you feel more optimistic about the future of your business? Have you purchased a new van, gotten seed funding, planned hiring, or been saved from filing for bankruptcy? Tell us in the comments.

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