2020 Small Business Outlook

California & Nevada business owners are more optimistic about 2020 than the previous 5+ years.

Each year, TMC Financing surveys our small business clients in California and Nevada to get an insight on their outlook and predictions for the coming year. According to about 150 small business owners who participated in the survey, the outlook is more optimistic than previous years.

Small businesses performed better than anticipated in 2019. Only 57% thought their revenue would increase in 2019 but 68% reported an actual increase in their 2019 revenue.

Seventy percent of respondents believe their revenue will increase in 2020, which is the highest percentage we’ve seen in 10 years. Twenty-seven percent predict their revenue will stay the same and three percent believe their revenue will decrease.

Also up this year is the number of employees that companies plan to hire. Fifty-three percent of respondents predict that they would hire additional employees in 2020, compared to only 42 percent in 2019. Three percent predict they will reduce their number of employees, which is down from six percent in 2019. Forty-four percent don’t anticipate increasing or decreasing their workforce.

“Over thirty percent of respondents reported that they are considering expanding in 2020,” said TMC President Barbara Morrison. “This is amazing to hear because it means they are thriving and ready to expand. It is also exciting to learn that those with thoughts on expansion are more interested in purchasing than renting. Purchasing property is definitely the way to go to ensure the longevity of your business and keep your occupancy costs stable.”

Eighteen percent of respondents reported that they plan to refinance their current debt this year.  The SBA 504 Refinance Loan is extremely beneficial to small business owners. It allows them to refinance conventional commercial real estate debt, allowing them to free up capital trapped in real estate and take advantage of the attractive terms of the 504 loan.

Eighty-seven percent of respondents reported that the 504 loan has helped their business. Sue Fox, owner of Grand Prix Car Wash, is grateful for the 504 loan as it “allowed us to remodel and add services to our business.”  Thomas Belcher, owner of Underwater Resources, Inc said taking ownership of his building with the 504 loan has allowed them to “put a cap on their overhead expenses.”

In fiscal year 2019, TMC Financing provided $287 million in SBA 504 financing to about 300 small business owners across California and Nevada, a volume that put us at the No. 1 SBA 504 lender in the nation.

TMC borrowers from the past year will to create or retain a 2,836. jobs.

The TMC Annual Small Business Outlook Survey for 2020 was conducted by email in November-December of 2019. The sample size of 155 is from a total population of 819 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.