It's getting easier for small businesses to borrow

NEW YORK (AP) — It's getting easier for small businesses to obtain loans but many owners still aren't interested in outside financing, according to a survey released Wednesday.

The results of the survey conducted last month by Pepperdine University researchers and Dun & Bradstreet Credibility Corp. are in line with others that have shown a modestly improved lending climate for small businesses. The Pepperdine Private Capital Access Index for small companies rose 0.5 point to 26.8 in the current quarter from 26.3 in the second quarter.

An accompanying Private Capital Demand Index fell 2 points to 32.3, an indication that owners are still conservative about getting outside financing, including loans.

One-quarter of the survey participants tried to get financing during the previous three months. That's little changed from 24 percent the second quarter.

Nearly two-thirds said it was difficult to get loans, while 19 percent said it was easy. That was an improvement from the second quarter, when 73 percent said it was difficult and 13 percent said it was easy.

"This study represents a welcome improvement in lending conditions since Q2," said Craig R. Everett, director of the Pepperdine Private Capital Markets Project at Pepperdine University's Graziadio School of Business and Management.

But owners' cautious approach toward getting financing is expected to remain in place for the rest of 2013. Only a quarter of the participants said they expected to seek financing, while 59 percent said they wouldn't. And 58 percent said expansion would be the primary reason why they'd seek financing.

And 51 percent of the businesses said they didn't plan to hire workers in the next six months, little changed from 52 percent during the second quarter.

Forty-two percent of those who tried to raise money or succeeded said they wanted the funds to expand their companies, little changed from 44 percent in the second quarter.

Among those who did not try to raise funds, 51 percent said their cash flow was enough to finance their needs, up from 43 percent in the second quarter.

The survey's respondents included 1,577 small and medium-sized companies in Dun & Bradstreet Credibility Corp.'s database. The company compiles corporate credit reports.

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