The start of September marks the end of the third quarter. For lenders, September is a busy month. Lending activity is at a high. Why? Because it's generally an active time for small businesses who are coming off of summer, seeking cash flow to keep the push going.
Overall for 2015, small business owners have been optimistic about hiring trends and growth in sales and revenue. How are they doing? According to the Intuit Small Business Employment and Revenue Indexes, numbers are still positive for revenue growth, despite one industry, in June and employment growth in July. They report the following:
Small Business Revenue Index - June
- Revenue per small business increased 0.4 percent across all industries; an annualized increase of 4.3 percent
- The greatest increase was in the real estate, rental and leasing industry, rising 0.9 percent in monthly revenue
- The accommodation, food service and drinking places industry was the only one to post a revenue decline of 0.02 percent
Small Business Employment Index - July
- U.S. small businesses added 10,000 new jobs. That's employment growth of 0.05 percent for the month and overall 920,000 jobs added since March 2010.
- Hourly employees worked an average of 109.7 hours, up five minutes from Intuit's June 2015 figure.
- Monthly pay increased by $3 or 0.10 percent, with average monthly compensation coming in at $2,825
Reports Still Show Optimism
The July 2015 National Federation of Independent Business (NFIB) report on small business economic trends shows an increase in optimism index of 1.3 points in July. The index is compiled from a monthly survey of NFIB members, currently over 350,000 strong. Components of the index include plans to increase employment, make capital outlays, increase inventories, expectations of the economy to improve, expectations of sales, and plans for expansion. These numbers are balanced by the current inventory, job openings and earnings trends.
While the gains in July were "grudging," they showed promise against the 4 points lost in June. Twenty-four percent did look to make capital outlays and 6 percent expected higher real sales.
Is It The Right Time To Increase Your Cash Flow?
The SBA shows a September trend--an on-average increase in lending activity of 12% over other months. Why? Likely the applications roll in during the summer months, when businesses generally see a slowdown. Summer consumer spending trends shift, and unless you are a seasonal business that peaks during summer months, the trends impact your revenues. Did you experience a weaker cash flow over the summer? Are you looking to increase your operations, marketing efforts or production in the next few months in anticipation of the holiday season?
Rebounding and building toward a successful fourth quarter can include seeking lending options to increase your cash flow, and in doing so, you are not in the minority. How are you wrapping up your third quarter?