2019 Small Business Outlook

California & Nevada business owners remain optimistic for 2019

Each year, TMC Financing surveys our small business clients in California and Nevada to get a pulse on their outlook and predictions for the coming year. According to about 400 small business owners who participated in the survey, the outlook is overall optimistic, yet less so than previous years.

Fifty-seven percent of respondents believed their revenue would increase in 2019. The last couple years, 62 and 64 percent believed their revenue would increase. Close to 10% predicted that their revenue would actually decrease, which is twice as high as it was the past two years.

Fifty-nine percent of respondents saw an increase in revenue in 2019, 27 percent reported their revenue stayed the same, and 14 percent reported a decrease in their revenue.

Also down this year is the number of employees that companies plan to hire. Forty-two percent of respondents predict they would hire additional employees in 2019, compared to 53 percent in 2018. Six percent predict they will reduce their number of employees and the remaining 52 percent predict their number of employees would stay the same.

“Over 20 percent of our borrowers reported that they are considering expanding in 2019 which is wonderful news,” states TMC President Barbara Morrison. “It means they are thriving in their space and ready to expand their reach! Moreover, the majority of those with expansion plans are likely to purchase over rent.”

Thirteen percent of respondents reported that they plan to refinance their current debt this year.  The SBA 504 Refinance Loan was introduced in 2016 and is a program proven to be extremely useful to small business owners. It allows borrowers to refinance conventional commercial real estate loans – allowing them to free up capital trapped in real estate and take advantage of the attractive terms of the 504 Loan.

Eighty percent of respondents reported that the 504 Loan has helped their business. Mark Peterson, Owner of D’Andre, Peterson & Bobus LLP, is grateful for the 504 loan as it “allowed us to have a predictable and stable monthly payment for the law office on an ongoing basis.”

In fiscal year 2018, TMC Financing provided $267 million in SBA 504 financing to 230 small business owners across California and Nevada. TMC borrowers from the past year plan to create or retain a total of 2,251 jobs.

The TMC Annual Small Business Outlook Survey for 2019 was conducted by email in November-December of 2018. The sample size of 387 is from a total population of 2000 borrowers who are part of TMC’s active loan portfolio and provides a confidence level of 95% with a margin of error of 5.77%. The views and opinions represented here are from a collection of business owners throughout California and Nevada and do not reflect the views of TMC Financing nor the U.S. Small Business Administration.