LOS ANGELES--(BUSINESS WIRE)--A survey from Pepperdine University’s Graziadio School of Business and Management shows 80.3% of small private business owners did not agree that the economic stimulus measures put forth to benefit businesses in the U.S. over the past year have been fairly distributed between publicly-traded and privately-held companies. Only 10.6% said they agreed that economic stimulus measures have been fairly distributed and even fewer (9.1%) said publicly-traded companies received less than a fair allocation.
Even among those respondents representing larger private companies (more than $100 million in annual revenues) a higher percentage (62.5%) said privately-held companies received less than a fair allocation of 2010 federal stimulus dollars. Roughly one-quarter (26.1%) said the economic stimulus measures were fairly distributed and one in ten (11.5%) said publicly-traded companies received less than a fair allocation.
In total, the survey (http://bit.ly/privatecapforecast) among 1,224 privately-held businesses, capital suppliers, intermediaries, and service providers collected from online surveys January 3-11, 2011, showed only 7.6% of respondents felt that privately held businesses benefited more from last year’s stimulus measures. Of all respondents, 64% of all private businesses said publicly-traded companies benefited more, 14.6% said both private and publicly-traded companies benefited equally and 13.7% said neither privately-held or publicly-traded companies benefited.
These findings are part of data recently released from the Pepperdine Private Capital Markets Project (http://bschool.pepperdine.edu/privatecapital), an investigation of the major private capital markets that examines the current state and outlook for the private capital industry.
The data comes on the heels of reports that on January 12, 2011, the Federal Reserve Bank bought $112 billion of a planned $600 billion of Treasuries and Treasury-inflation protected securities despite a strengthening economy. The central bank highlighted that the large bond purchase was necessary to bring the unemployment rate down.
“There is a prevailing view, especially among small private businesses who represent Main Street, that the benefits from the federal stimulus measures largely missed privately-held businesses,” said Dr. John Paglia, lead researcher of the Pepperdine Private Capital Markets Project and associate professor of finance at Pepperdine University’s Graziadio School of Business and Management. “The recent stimulus measures may have helped stabilize the economy but the benefits did not reach the job creating small business sector. I believe this is consistent with the actions we are seeing now from the Fed.”
In fact, according to those surveyed 69.7% felt that privately-held businesses will create more jobs in 2011 whereas 17.5% felt publicly-traded companies will create more jobs. Among small businesses, limited access to capital (31.5%), uncertain economic environment (25.5%) and government regulations (25.5%) are the largest impediments to economic growth. Privately-held business owners report that increased access to capital (44.4%) would help spur job creation the most in 2011 followed by tax incentives (19.0%), increased competition with trade partners (14.4%) and regulatory reform (13.7%).
“Small business owners are even more optimistic about the growth opportunities in 2011 than they were one year ago and are confident they can carry most of the job creation load for the economy,” said Dr. John Paglia. “Unfortunately many of these otherwise viable businesses are suffocating from the lack of vital growth capital that is necessary to ignite the job recovery engine.”
With over 99% of companies having fewer than 500 employees, our economy is dependent upon the success of small businesses. The Pepperdine Private Capital Markets Project is a critical step along the path of understanding and increasing the value of private companies and our economy. Professionals who work in the lending or investment arenas either for an institution or a specific fund are excellent bellwethers of what is ahead for other businesses and consumers. Through two survey cycles and published summary reports per year, lenders, investors and the businesses that depend on them will be able to make optimal investment and financing decisions, and better determine where the opportunities to create lasting economic value may be realized.
The Winter 2011 Pepperdine Private Capital Markets Project summary report and 2011 economic forecast survey findings are available at: http://bschool.pepperdine.edu/privatecapital.
About the Graziadio School of Business and Management
Founded on the core values of integrity, stewardship, courage, and compassion, Pepperdine University’s Graziadio (GRAT-ZEE-ah-DEE-oh) School of Business and Management has been developing values-centered leaders and advancing responsible business practice since 1969. Student-focused, experience-driven, and globally-oriented, the Graziadio School offers fully accredited MBA, Masters of Science, and bachelor’s completion business programs. More information found at http://bschool.pepperdine.edu/newsroom/.