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Small businesses will need capital in 2014

Date posted:  11/18/15 12:00:00 AM Small businesses will need working capital in 2014.

Nineteen of 20 small business owners said they'll need additional working capital for their companies next year, according to a survey from Balboa Capital.

The small business loan provider sent its online survey to more than 300,000 business owners across the nation. The survey was delivered to a wide range of industries and assessed their financial needs and knowledge of working capital loans. More than 40 percent of small business owners said they are not familiar with working capital loan options, while 13 percent said they were very familiar.
Working capital loans are used for a business' short-term capital needs, and they can be used to fund a wide variety of daily operating expenses.

"Small and mid-sized companies have found it difficult to secure traditional business loans and lines of credit from banks and credit unions, but working capital loans are an excellent alternative," said David Van Patten, Balboa Capital's business funding director. "Based on the results of our extensive survey, many business owners are not familiar with working capital loans, and our goal is to make them aware of this convenient financing option."

The survey stated that 27 percent of business owners had ever applied for a working capital loan at a bank, but only 19 percent had their loans approved. Nearly 50 percent of respondents said their business would need working capital in order to expand or purchase new equipment in the next 12 months.

Small business and better access to data

The percent of small businesses that need working capital might dwindle in the Balboa survey next year if a prediction from Constant Contact comes through.

Constant Contact, a company that helps small businesses with engagement, said that small businesses will have more access to sales receipts, Facebook Insights and Google Analytics than ever before in 2014. That type of data and insight can help a business understand what is or isn't working for it, such as what time of day is best for delivering email marketing campaigns and what type of social media content drives engagement.

"Understandably, small businesses don't often have dedicated teams to leverage Big Data assets - but there will be greater attention given to how insights can be leveraged in 2014," said Jesse Harriott, Constant Contact's chief analytics officer. "Small businesses will benefit from the practical insights companies like Constant Contact pull from data, helping small businesses to see around the corners. And that will be a game-changer."

Mobile commerce becomes standard

Small businesses have just started to scratch the surface of possibilities that mobile commerce can deliver in 2013. In the coming year, mobile consumer bases should grow even more, spurring additional mobile business practices. According to ABI Research, the number of mobile users should grow to 1.4 billion by the start of 2014. That means the 34 percent of small businesses that aren't currently using mobile devices should plummet as companies look to stay ahead of the curve.

"2014 is the year the mobile commerce becomes standard for small businesses," said Andy Miller, Constant Contact's director of innovation. "Small businesses will need to react quickly to the shift in consumer expectations, as consumers will demand mobile POS and payments in droves from businesses large and small. The good news for small businesses is that the technology driving mobile POS has come a long way in the past few years, and 'going mobile' with POS is not a behemoth task to accomplish."

Constant Contact also pointed to a possible shift in a business' social media plan, as companies start to consider YouTube and Pinterest with the likes of the big three: Facebook, Twitter and LinkedIn. The engagement firm said that as user attention spans dwindle, the use of a short video or picture can carry weight.