NEW YORK (MainStreet) — Half of small business owners would hire more employees if the current business environment changed and more loans were made available, according to the latest Dun & Bradstreet Credibility Corp. and Pepperdine Private Capital Access (PCA) Index quarterly report.

The report shows that small and medium sized businesses are demanding less capital, because they are dissatisfied with the financing options that are available to them, said Jeff Stibel, CEO of Dun & Bradstreet Credibility Corp., a Los Angeles business credit building company. Since last quarter, the demand from small businesses for capital in the third quarter decreased by 6.2%.

“Businesses are still weary of the current economic environment when it comes to their outlook accessing capital,” he said.

Most business owners turn toward traditional business loans and are not aware of their options, Stibel said.

“Small businesses are increasingly self-reliant and lenders are continuing to show a great deal of restraint in lending to small enterprises,” said Craig Everett, director of the Graziadio School’s Pepperdine Private Capital Markets Project. “When businesses are forced to grow organically using only retained earnings, their growth opportunities are capped at a very low level. This reality is starting to have profound impacts on both hiring and spending on business improvements.”

Out of the 58.4% of private businesses that attempted to get financing from a bank in the last three months, 54% of them found themselves to be successful. Out of the companies who tried to get a loan, 24.9% of those respondents applied for asset-based loan in the last three months and only 30% of them were successful.

Small business owners are also planning to increase their operations throughout the U.S., according to a survey conducted by Ink from Chase and The National Association of Women Business Owners.

During the next 12 months, 57% of small business owners plan to increase their business, and more than half of them are looking to geographically expand over the next year, said Laura Miller, president of Ink from Chase in Wilmington, Dela..

The owners said they plan to increase sales by to reach current and potential customers with 61% who will use marketing while 56% will attract clients through social media.

While only 25% of owners plan to increase head count during the next 12 months to grow their business, most of them plan to hire full-time employees as they expand, the survey found.

“With any growth comes the need for additional employees,” she said. “Our survey of small business owners across the country found that those who are hiring say they will most likely hire full-time employees. Part-time hires are also in the forecast as nearly 60% of small business owners plan to hire part-time employees within the next 12 months to support business growth.”

Small business owners plan to implement new technology to help grow their business, with 40% of small business owners will use new technology to build operations and 60% who say they plan to use payment platforms in the next 12 months.

Companies with fewer than 100 employees are reacting to the economy’s volatility cautiously with only 34% who gave employees smaller raises in 2013 than in previous years, according to a study conducted by Aflac, the Columbus, Ga. voluntary insurance provider. Only 24% said they plan to do the same this year and 18% plan to eliminate or delay raises in 2014.

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Hiring at smaller companies remains at a slower pace with 45% of them hiring full-time workers in 2013 compared to 71% of mid-sized companies and 60% of large organizations who added full-time employees.

“Employees at a small business might be satisfied with their pay, enjoy their company environment, their colleagues and the work itself, but that doesn’t mean better benefits offerings elsewhere won’t entice them to leave,” said Teresa White, chief operating officer of Aflac Columbus.

Stagnant wage growth has impacted employees greatly, according to a survey by McGraw-Hill Federal Credit Union which said that 60% of employees are more willing to take loans and 44% are willing request hardship withdrawals from retirement savings during past 12 months.

Nearly 40% of employees are facing more personal finance challenges now compared with the onset of the great recession in 2007, the survey said.

Personal financial challenges are affecting employees while they are on the job with seven out of ten human resources professionals who indicated in the survey that the monetary issues have a large or some impact on their employees’ performance.

--Written by Ellen Chang for MainStreet

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