Women Business Owners' Optimism Improves

Posted by: John Tozzi on June 14, 2011

Women business owners are more optimistic about the economy than they were six months ago, a new survey suggests, though their confidence has dropped since a year ago. Almost half of the 164 respondents to the April Key4Women Confidence Index expected better business conditions in the six months ahead, up from one-third in the October survey. One year ago, 59 percent expected business conditions to improve.

(Click chart to enlarge. Totals may not equal 100 due to rounding.)

KeyBank and the nonprofit Center for Women’s Business Research began surveying an online panel of women business owners twice a year in 2009. For the first time in that period, business owners responding to the survey reported both growing revenue and net earnings over the previous quarter. Though it’s hard to compare with a monthly survey, the Key4Women index comes at the same time the National Federation of Independent Business’s optimism index declined for the third month in a row.

The recovery “has not been like any recovery I’ve ever seen,” Maria Coyne, head of Business Banking for Key, told me. Cleveland-based Key, with $90 billion in assets, is one of the nation’s 25 largest banks and has a footprint in 14 states. Coyne says small businesses are most concerned about high energy and commodity costs and health care. In some cases they’re passing rising costs along to customers. They’re also struggling to manage cash flow as customers take longer to pay.

Coyne says that demand for small business loans is increasing and “virtually every component of underwriting” has improved, including companies’ cash flow, collateral values, and personal credit scores. She says the inflection point where loan demand began to recover was around the beginning of 2011. Key is seeing the most loan applications since the middle of 2008, before Lehman Brothers’ collapse precipitated the financial crisis. “Demand is definitely increasing,” Coyne says.

The survey found that 31 percent of respondents got “all, most, or some” of the credit they were seeking in the last six months, while 16 percent got none. (The rest presumably were not seeking credit.) Plans to hire more employees were at the highest in the two years that the question has been asked.

The Key4Women Confidence Index over-represents firms with employees compared to the broader population of women business owners. More than 80 percent of the firms surveyed are employers, compared to 12 percent of women-owned firms in the general population.