As expectations by small- and mid-size firms declined a bit in the third quarter from the second quarter, so has those companies’ demand for capital, according to a new Private Capital Access Index survey by the Pepperdine Graziadio School of Business and Management.
The survey, conducted in partnership with Dun & Bradstreet, was of 1,176 people in companies with less than $5 million and between $5 million and $100 million in annual revenue.
Firms surveyed with revenue below $5 million saw their annual revenue expectations drop to 9.3% in the third quarter from 10.6% in the prior quarter, while those with between $5 million and $100 million saw a similar decline in expectations.
Meanwhile, the survey found 22% of all firms expected slower trade account payments than they did in the prior quarter, while between 65% and 67% said payment periods would stay the same. Thirty percent of respondents said slowing payments have reduced their ability to grow, with the impact being more widely felt among smaller firms. Eight percent said they’ve had to reduce staff due to slower payments.
Six percent of survey respondents also said they had relied on a trade credit provider for credit in the last quarter, while more respondents (18%) said they borrowed from a large bank or community bank (13%).
– Nicholas Stern, managing editor