Small Businesses Still Ailing

The National Federation of Independent Business — the small-business lobbying organization — reports that small-business optimism declined in February. Small businesses reported smaller workforces and continued price cutting, among other sluggish stats. This chart encapsulates the continued bad times:

The yawning gap on the right side of the chart shows that while small businesses continue to expect improved sales, actual sales remain at historical lows.

The report comes just months after another, more comprehensive dismal report, “Small Business Credit in a Deep Recession.” It shows that, despite the lifting of the recession, as of February, small businesses have less access to credit than they did a year ago. The percentage of small businesses holding a loan has fallen 20 percent year-on-year. More than half of small businesses cite “slow or declining” sales as a major issue, up eight percent from one year ago. And only 40 percent of small businesses attempting to borrow had all of their needs met.

Small businesses — which over the past 15 years have generated nearly two-thirds of new jobs — continue to show low optimism and sustained difficulty accessing credit, despite the Obama administration’s efforts: more than $15 billion in loan guarantees through the Small Business Administration, $33 billion in tax breaks for new hiring and increased loans to small businesses through the multi-billion-dollar Term Asset-Backed Securities Loan Facility, or TALF. The administration has made a concerted effort to ensure the flow of credit to small businesses for more than a year now — but many programs remain in plenary stages, and thus far, they have evidently had little effect. For months, the NFIB has advocated a payroll tax holiday to gin up hiring. But that measure remains controversial and unmentioned by the White House and Congress.