LOS ANGELES, June 12, 2019 /PRNewswire/ -- Alternative lending options are on the rise for both small (<$5 million in revenue) and mid-sized ($5 - $100 million) businesses, according to results from the Q2 Private Capital Access Index (PCA Index) from Dun & Bradstreet and Pepperdine Graziadio Business School.
Thirty-four percent (34%) of respondents attempted to raise financing in the last quarter, up from 29% reported in Q1. Attempts to secure a loan from a traditional bank has declined since Q1, however, with 41% of businesses reporting that they sought a bank loan as a source of funding compared to 49% the previous quarter. Bank loan success rates are also down for both small and mid-sized businesses, with 32% of small businesses (down from 41% the previous quarter) and 89% of mid-sized businesses (down from 95% the previous quarter) reporting success rates for bank loans.
More businesses sought alternative funding options in the prior three months than in Q1, such as business credit cards (53%), crowdfunding (20%), online lenders (29%), factoring (16%) and merchant cash advance (15%).
"As the dust has settled on the 2008 financial crisis and the lending regulations are becoming looser, it's not surprising that we're seeing an increase in the options and access to alternative financing for small businesses," shared Nalanda Matia, Sr. Director Economics Solutions at Dun & Bradstreet. "As predictions increase around a potential cut in interest rates from the Federal Reserve, it is important to be aware of the volatility in the macroeconomic fundamentals despite a possible ease in access to the both traditional and alternative types of financing."
The PCA Index is a quarterly indicator produced by the Pepperdine Graziadio Business School and Dun & Bradstreet. The Q2 2019 Index report was derived from 848 completed responses collected between April 8 – May 17, 2019.
Download the latest index data here and follow us on Twitter at @GraziadioSchool and @DnBUS.
Contacts:
Dun & Bradstreet
Lauren Ward, 310-919-2230
[email protected]
SOURCE Dun & Bradstreet
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