Seven out of ten feel well placed to borrow, with equipment financing being their top need.
WILMINGTON, Del., Nov. 17, 2022 (GLOBE NEWSWIRE) — Mid-Atlantic small businesses are optimistic about their ability to maintain revenue at the current pace or even grow next year despite economic struggles and cost stresses. found a new Small Business Trends study by WSFS Bank.
The study, which surveyed 500 small businesses in the Mid-Atlantic, measures owner-operators’ prospects for the economy, the impact of inflation and other stressors on their businesses, as well as their banking relationships and borrowing needs.
Optimism for the future of their company
Overall, 83% of small business owners and executives believe sales will improve or stay the same over the next 12 months. Of these, more than half (54%) expect an improvement.
However, the same is not true for their confidence in the economy over the next six months, as 43% believe the Mid-Atlantic economy will improve and only 34% feel the same about the national economy.
Despite this lack of confidence in the economy and numerous setbacks — including rising material and gas costs — for their businesses, 76% are optimistic their business will still be operational 12 months from now, and 69% feel ready to “weather another storm.” survive”.
Inflation, Operation and Health
However, the setbacks suffered in their businesses over the past two years remain significant obstacles to success.
61% felt negative impacts from the pandemic, with 48% employees and/or family members who contracted COVID-19 burdening the business. More than half (52%) said rising inflation is having a negative impact. Increased material and operating costs have hit 54% of the small businesses surveyed, and nearly four in ten (38%) are also feeling the pressure from gas prices.
“While the general optimism among small businesses is encouraging, the impact of rising business costs coupled with health concerns in an environment where it is difficult to find and retain workers is worrying,” said Candice Caruso, senior vice president, chief retail Lending Officer for WSFS Bank. “These results underscore the importance of supporting small businesses in our communities not just this holiday season but throughout the year. Small businesses are the lifeblood of the US economy, supporting our communities through job creation, innovation, essential services and more. When you support a local small business, more of those dollars are reinvested back into our local communities so we can all thrive.”
Many small businesses relied on their banking relationships to get through the past year, with 54% saying their bank was extremely or very proactive, which was in line with their expectations. Good relationships with their bank were often cited as a reason they are able to secure financing, with seven in ten (71%) confident they will do so.
“Finding a banking partner who understands the community and its history is a key differentiator when serving small businesses. Local lending decisions more effectively support the growth needs of the business because your banker knows the location of the business, the competition, the customer base, and the communities that the small business serves,” said Caruso. “These factors can go a long way in helping a company move forward through access to key capital and other small business services.”
Almost half (45%) are considering a new loan to reinvest in their business by purchasing equipment, while another quarter (26%) of small businesses would use the loan to purchase real estate. However, more than half said they would use the money to keep themselves afloat, with 28% using the money to pay workers and 24% to cover losses.
“Relationships matter in every aspect of running a business, and having a good relationship with your banker is critical to short- and long-term success,” Caruso said. “It’s exciting to see that companies are preparing to reinvest in their future, but it’s important that small business owners are aware of how they are using debt to grow their bottom line. This can be done through business expansion, equipment or working capital to meet inventory or staffing needs. All small business owners and executives should consult their banking advisor to create a plan for the year ahead and discuss key options like cash management tools that can help them operate as efficiently as possible. Cash flow predictability is one of the most important health indicators of a successful small business.”
The study was conducted by OnePoll on behalf of WSFS Bank. The sample included 500+ senior managers at small Mid-Atlantic companies (up to $5 million in annual revenue and at least two employees) in New Jersey, Delaware, Pennsylvania (east of Harrisburg), Maryland, and Virginia. Respondents were interviewed from September 23 to November 1, 2022 with an error rate of +/- 4.47 percent.
About WSFS Financial Corporation
WSFS Financial Corporation is a multi-billion dollar financial services company. Its principal subsidiary, WSFS Bank, is the oldest and largest bank and trust company based in Delaware and the Greater Philadelphia region. As of September 30, 2022, WSFS Financial Corporation had $20.0 billion in assets on its balance sheet and $61.4 billion in assets under management and under management. WSFS operates from 119 offices, including 92 bank offices, in Pennsylvania (61), Delaware (39), New Jersey (17), Virginia (1) and Nevada (1) and provides comprehensive financial services including commercial banking, retail banking, cash management and trust and asset management. Other subsidiaries or divisions include Arrow Land Transfer, Bryn Mawr Trust®, The Bryn Mawr Trust Company of Delaware, Cash Connect®, Cypress Capital Management, LLC, NewLane Finance®, Powdermill® Financial Solutions, West Capital Management®, WSFS Institutional Services® , WSFS Mortgage® and WSFS Wealth® Investments. WSFS Bank, operating in the Greater Delaware Valley since 1832, is one of the ten oldest banks in the United States to continue operating under the same name. For more information, visit www.wsfsbank.com.
Media contact: Eric Springer