California small businesses may be optimistic regarding their plans for growth, with 65 percent of businesses planning to hire in the coming months, and 58 percent in need of financing for planned growth, according to the most recent Private Capital Access Index* from Pepperdine University and Dun & Bradstreet. Both of these data points are higher than the national average. While California small businesses may be performing better than the rest of the nation when it comes to growth, they fall short when it comes to successfully applying for and receiving loans. Only 36 percent of businesses who applied for a loan in Q2 2015 received one, compared to a slightly higher 37 percent nationally. With only a third of applicants receiving a loan, it comes as no surprise that California small businesses are feeling restricted. Of those surveyed, 60 percent feel their growth opportunities are restricted and over half feel their ability to hire is restricted, compared to the national averages of 58 and 48 percent, respectively.
Without better access to small business loans, California small business owners may have to find funding elsewhere, like they did in Q1 2015 when over a third of California small businesses surveyed were forced to dig into their personal assets to fund their business. If loans continue to be difficult to obtain, more businesses may find themselves relying on their personal assets to fund their growth, and if they can’t turn to their personal assets, they may be in trouble down the line.
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See more statistics on California small businesses in the graphic below: