More small business owners say their company’s current financial situation is good, yet their outlook for the next year has not changed significantly, according to the latest Wells Fargo/Gallup Small Business Index. Wells Fargo’s Savannah Market President Jenny Gentry and SCORE Savannah say the same holds true for Savannah businesses.

To help businesses accelerate their growth, Wells Fargo announced a new push it calls Wells Fargo Works for Small Business. The initiative includes a comprehensive online resource at www.wellsfargoworks.com and a $100 billion lending goal to small businesses in the next five years.

In the quarterly small business survey, conducted July 7-11, the overall Small Business Index score increased slightly to positive 49 (+49) in July, up two points from positive 47 (+47) in April. The score, which measures small business optimism, has increased six of the last seven quarters. Small business optimism is now at its highest point in more than six years, however it remains well below pre-recession levels.

Small business owners feel more optimistic about present situation

The present situation – how business owners’ rate current conditions for their businesses – is the main contributor to increased optimism in the latest survey. The present situation score is now at a positive 18 (+18), up four points since the April survey and 14 points from the same period a year ago. Specific factors that contribute to the improvement include:

• Small business owners are feeling better about their current business financial situation, with 62 percent rating it as very or somewhat good, up from 57 percent in the second quarter 2014.

• More business owners report their company’s revenues have increased, with 43 percent indicating revenues are up in the past 12 months compared with 36 percent in April.

• Cash flow over the past 12 months also is at a six-year high. In the survey, 55 percent of business owners report their cash flow has been very or somewhat good over the past year, up from 50 percent in the second quarter of 2014.

• Ease of obtaining credit in the past 12 months is up significantly – 32 percent of small business owners say that it has been very or somewhat easy to obtain credit in the past 12 months.

Optimism among small businesses in Savannah is evident

Improved optimism can be seen among Savannah’s business owners.

Wells Fargo lending to small businesses in Savannah has increased in recent years.  Last year, compared to the year before, lending to mid-sized businesses was up 65 percent at Wells Fargo.

“Business owners in Savannah are coming to us for credit,” said Gentry.  “For so many years, Savannah small business owners have held back but now they are cautiously moving forward, which shows that they are feeling more confident.”

For smaller businesses with revenues of $2 million or less, lending volume is up 50 percent this year, compared to last year.

Wells Fargo regularly joins with SCORE Savannah to educate local business owners on cash flow, credit and more. Al Torpie, a mentor with SCORE Savannah, says SCORE is meeting with twice as many entrepreneurs as in years past. SCORE offers workshops to educate business owners on what they need to do be successful. “Attendance has doubled as more business owners are looking for guidance on running and growing their businesses,” said Torpie.

“It’s a great time to be working together to help businesses grow in Savannah,” said Gentry.

Survey finds outlook remains unchanged

The outlook for business owners in the July survey was relatively unchanged, down two points to positive 31 (+31) from positive 33 (+33) in the second quarter. In three surveys conducted in 2014, the percent of business owners who think their businesses’ cash flow, financial situation and revenue would improve over the next 12 months has not moved significantly. The percent of business owners who expect to increase capital spending in the year ahead is the same as those who plan to decrease (25 percent).

“Many businesses still face challenges in the marketplace and it’s reflected in the survey results. Many continue to wait for more improvement in their businesses and the economy before they express confidence in the year ahead,” said Gentry.

Small Business use of technology

In the latest Wells Fargo/Gallup Small Business Index, business owners were asked about the impact and use of technology in their businesses, and their responses show that many business owners are using mobile technology and social media to run and market their businesses, and communicate with customers.

Some of the key findings include:

• Website: Small business owners have become increasingly likely to report having a business website – now at 59 percent compared to 54 percent in 2011.

• Personal computer/tablet: Nearly four in 10 use a tablet and about one-third are using cloud-based computing software to run their businesses.

• Social media: Among all small business owners surveyed, social networking sites are used in a variety of ways to help grow their business, including connecting with customers (37 percent), marketing and promotion (34 percent), building an online reputation (34 percent) and advertising (33 percent).

• Online/mobile banking: Seventy-two percent of business owners use a desktop or laptop to do their banking. And, 40 percent use their mobile device to conduct banking related to their small business. Among business owners who use mobile banking, 44 percent said they use their smartphone/tablet to monitor cash flow for their business; 16 percent use it for mobile deposits; and 14 percent use it to pay bills. Those business owners who don’t use mobile banking said their preference for doing banking in person (40 percent) and security concerns (23 percent) were the top reasons.

Wells Fargo helps through state-of-the-art online resource

Recently, the bank introduced the Wells Fargo Works for Small BusinessSM initiative, delivering various resources, guidance and services to help more small businesses achieve financial success. With the new initiative, Wells Fargo also announced the goal to extend $100 billion in new lending to small businesses by 2018.

WellsFargoWorks.com is an enhanced online resource that offers useful financial guidance on topics such as building credit and sustaining growth to help business owners increase their knowledge and confidence. The site includes hundreds of feature stories, informational resources and videos,

Small Business Index Key Drivers

Wells Fargo, together with Gallup, surveys small business owners quarterly across the nation to gauge their perceptions of their present situation (past 12 months) and future expectations (next 12 months) in six key areas: financial situation, cash flow, revenues, capital spending allocation, hiring, and credit availability.

Wells Fargo/Gallup Small Business Index Scores: Q2 2013 – Q3 2014

                             Overall Index Score    Present Situation      Future Expectations   

Q3 2014 (surveyed in July 2014)        49                   18                 31                                           

Q2 2014 (surveyed April 2014)           47                   14                 33                                 

Q1 2014 (surveyed January 2014)      45                    16                29                                    

Q4 2013 (surveyed October 2013)      24                    7                  17                                 

Q3 2013 (surveyed July 2013)            25                   4                   21                                

Q2 2013 (surveyed April 2013)           16                   2                   14