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Survey indicates growing concern from small businesses about survival

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Aside from rising health care costs, falling sales and other typical explanations for low employee headcounts, an increasing mass of small-business owners are halting their hiring practices due to concerns that their businesses won't survive through 2013, according to the latest Wells Fargo and Gallup quarterly survey.

Across various industries nationwide, 30 percent of the 601 small-business owners surveyed said they are not hiring more workers because they are worried they may no longer be in business 12 months from now — up from 24 percent who expressed the same concern in January 2012, which the poll said is “a bad sign not only for small-business hiring and capital investment, but also for the overall U.S. economy in 2013.”

Those results surprised a New Jersey banking expert, who said access to credit for small businesses in the state is at an all-time high since the financial crisis began.

“We’ve been pushing to lend as much as we can, so if customers are willing to spend money, it will be there for them to borrow,” said Alan Wyosnick, Wells Fargo’s New Jersey business banking manager, who noted Wells Fargo’s lending volume in the state increased 40 percent through 2012. “With today’s level of lending energy and availability, the climate is there if business owners want to take advantage of it.”

Still, Wysonick said the greatest slice of that loan growth in New Jersey stems from a boost in demand for cash management services, which means small businesses are increasingly investing in products that allow them to be more efficient with fewer workers.

“As businesses keep looking for efficiencies, I think lending activity and revenue growth will far outpace job generation in the year ahead — so if revenue goes up 20 percent, you’re not going to see 20 percent more hiring,” Wysonick said. “Still, you can grow your revenue and make your business more efficient, but eventually you’ll have to hire somebody.”

In the Wells Fargo and Gallup January 2012 poll, 22 percent of small-business owners reported decreasing their work forces over the past year, compared to the 12 percent who said they hired more workers in that time period. However, looking ahead to December 2013, 17 percent of small companies plan to increase headcounts, while 12 percent plan to cut jobs.

Write to the Editorial Department at editorial@njbiz.com

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