WSFS Study Finds 45% of Small Businesses Considering Equipment Purchases



According to a study from WSFS Bank, Mid-Atlantic small businesses are optimistic about their ability to keep revenues at their current pace or even increase them in the next year despite economic woes and strains on their costs.

The study, which surveyed 500 Mid-Atlantic small businesses, measured owner/operators’ outlook on the economy, the impact of inflation and other stressors on their businesses and their banking relationships and lending needs.

Optimism for the Future

Overall, 83% of small business owners and leaders believe revenue will improve or stay the same within the next 12 months. Of those, more than half (54%) expect improvement.

However, the same cannot be said for their confidence in the economy over the next six months, as 43% feel the Mid-Atlantic economy will improve and only 34% feel the same about the U.S. economy overall.

Despite this lack of confidence in the economy and numerous setbacks — including rising costs for materials and gas — for their businesses, 76% are optimistic their businesses will still be operating in 12 months, with 69% feeling prepared to “weather another storm.”

Inflation, Operations and Health

Setbacks to their businesses experienced over the past two years remain significant obstacles to success, however. Sixty-one percent of respondents said they felt negative impacts of the COVID-19 pandemic, with 48% having employees and/or family contracting COVID-19 cause stress on their businesses. More than half (52%) cited rising inflation as having a negative impact. Increased costs for materials and operations have affected 54% of small businesses surveyed, and nearly four in 10 (38%) are feeling the crunch of gas prices, too.

“While it is encouraging to see overall optimism among small businesses, the impacts of rising business costs, coupled with health issues in an environment where it is difficult to find and retain workers, is concerning,” Candice Caruso, senior vice president and chief retail lending officer for WSFS Bank, said. “These findings underscore the importance of supporting small businesses in our communities not only this holiday season, but throughout the year. Small businesses are the lifeblood to the U.S. economy and support our communities through job creation, innovation, essential services and more. When you support a local small business, more of those dollars are reinvested into our local communities so that we can all thrive.”

Relationships Matter

Many small businesses have leaned on their banking relationships to navigate the past year, with 54% saying their bank was extremely or very proactive and in line with their expectations. Having good relationships with their banks was often cited as the reason they can secure financing, with seven in 10 (71%) feeling confident in doing so.

“Finding a banking partner that knows the community and its history is a key differentiator in serving small businesses. Local lending decisions more effectively support the business’ growth needs, as your banker knows the business’ location, competition, customer base and the communities the small business serves,” Caruso said. “These factors can go a long way in helping a business advance through access to key capital and other small business services.”

Nearly half of respondents (45%) are considering new loans to reinvest in their businesses by purchasing equipment, while another quarter (26%) of small businesses would use loans to buy property. However, more than half indicated they would use the funds to stay afloat, with 28% using the money to pay workers and 24% for covering losses.

“Relationships do matter in every aspect of running a business, and having a good rapport with your banker is critical for short- and long-term success,” Caruso said. “It’s exciting to see that businesses are preparing to reinvest in their future, but it is important that small business owners are clear on how they are leveraging debt to drive their bottom line. This could be through business expansion, equipment or working capital to address inventory or staffing needs. All small business owners and leaders should consult their banker to map out a plan for the coming year, discussing important options — like cash management tools — that can help them operate as efficiently as possible. Predictability of cash flow is one of the key health indicators for a successful small business.”

Survey Methodology

OnePoll conducted the study on behalf of WSFS Bank. The sample included 500 senior managers and above at Mid-Atlantic region small businesses (annual revenues of up to $5 million and minimum two employees) in New Jersey, Delaware, Pennsylvania (east of Harrisburg, PA), Maryland and Virginia. Respondents were surveyed from Sept. 23 to Nov. 1, with a margin of error of 4.47%.


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Terry Mulreany
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