New York (PRESS RELEASE – December 2, 2010) – In stark contrast to famed economist Arthur Laffer’s dire warnings about a collapse of the US economy early in the coming year, owners of small- and mid-sized businesses across the country are feeling optimistic, citing increased hiring and profit growth among key 2011 business predictions. These were among the results of the first semi-annual survey of business owners conducted nationally in November 2010 by Prepaid Expense Card Solutions, Inc., provider of The PEX Visa Prepaid Card for Business, issued by The Bancorp Bank; member FDIC, a corporate Visa Prepaid card solution for small- and mid-sized businesses.
“What we noted in the survey’s results mirrors the anecdotal evidence we’ve gathered from conversations with our clients, specifically that 2010 has thus far been better than originally expected, and economic and business optimism is trending in a positive direction for 2011,” said Toffer Grant CEO and Founder of PEX Card. “America was built on the backs of small and mid-sized businesses. They are the engines that will power us back to a secure economic footing, which is why their opinions are a strong indicator of the financial future.”
PEX Card’s major findings include:
A Review of 2010
When asked whether their 2010 business performance has shaped up to be better or worse relative to their expectations at the outset of the year, 71% of respondents noted “much better” or “somewhat better than expected.” Just 4% of business owners answered “worse than expected.”
Twenty-one percent of business owners said they’d been turned down for a bank loan or credit line in the past year, and 38% said that credit card companies had “unjustifiably” either lowered their card’s credit limit or closed the account completely.
Asked to rate on a 1-10 scale (with 10 being the most difficult) how hard it has been over the past year to maintain adequate cash flow for their businesses, 48% of owners ranked between 6-10, the “most difficult” end of the scale. Twenty-seven percent fell into the “least difficult” category, with rankings of 1-4.
The cash flow issue was again raised in response to the question of “as a small business owner, which issues keep you awake at night?” The majority of respondents (65%) noted “sufficient cash flow” with “taxes” (31%), “volatile sales” (29%), and “debt” (25%) rounding out the top four answers.
Turning to 2011, respondents evidenced an optimistic outlook about their business performance, with 34% of owners saying they expected profits in the coming year to be “significantly better” than in 2010. Twenty-eight percent of respondents answered “slightly better” to the same question, and five percent noted “slightly worse.”
Not surprisingly, based on owners’ profit optimism, 59% said they planned to add to their employee count in 2011. Twenty-eight percent said they don’t know yet, while 14% said “no.”
The Obama Administration came under fire from small business owners. When asked if the administration is doing enough to support small business owners, 60% of respondents said “no.” “Yes” and “I don’t know” were evenly ranked at 20% each.
Questioned about what could be most helpful to America’s small businesses, more than half of owners (51%) said, “tax breaks,” followed by “easier bank lending practices” (31%) and “government stimulus” (13%).
About the Study
The PEX Card Small Business Survey was conducted online by PEX Card in November 2010. Results are based on responses from 81 small business owners nationwide. The study’s copyright is held by PEX Card.
About PEX Card
PEX Card is a corporate prepaid card solution for businesses that need complete control over employee expense spending, and is the prepaid card industry’s first turnkey commercial card program. Business customers use online tools to manage budgeting by allocating pre-funded deposits onto cards that employees use for authorized spending. The PEX Card Service provides 24/7 real time card funding and immediate visibility into cash flow, while helping businesses maximize control and manage risk.
About The Bancorp Payment Solutions Group
The Bancorp Payment Solutions Group, a division of The Bancorp Bank (“Bancorp”), a wholly owned subsidiary of The Bancorp, Inc., offers secure, creative and innovative payment solutions to the prepaid card industry. As a leading issuer of prepaid cards, The Bancorp Payment Solutions Group contributes to the success of Fortune 500 companies through the development of cutting-edge prepaid card programs that meet the rapidly changing needs of the prepaid industry. Through long-standing relationships with the MasterCard, Visa, and Discover card associations, leading program managers and processors, The Bancorp Payment Solutions Group designs innovative and flexible prepaid card programs which deliver outstanding results.