Majority of the US SMB owners feel that US economy to be still in recession and hence are not comfortable doing hiring and spending capital. According to the survey “2011 U.S. Bank Small Business Annual Survey” conducted by US Bancorp, about 70% of the US small business reported that they have no plans to hire more people and also they don’t want to expand their staffs in the next 12 months. The Bancorp surveyed nearly 1,004 businesses (having annual revenue of less than $10 million) to found out what are the biggest challenges faced by them, 26% of the SMEs surveyed cited that economic uncertainty as their biggest challenge, 16% cited poor sales as their major challenge and 12% cited federal regulations.
Further, 78% of respondents cited that they feel the economy is still in a recession compared to 89% in the 2010 survey. They feel that it will remain the same for the next year too. For this reason, SMEs are not interested in borrowing money or securing loans. Only 20% of the respondents said they have borrowed or tried to borrow money in the past six months.
With many of the banks having started to focus on small business to boost the economy, about 43% of the respondents cited that their banks are very helpful for their business. Another 32% (up 10% from 2010) cited their banks provide them with everything they need.