Small business owners are growing more confident in their own prospects as well as the wider U.S. economy. Driving the surge in optimism are improved hiring and consumer spending expectations.
According to a survey released this week by Citibank, roughly a third of small firms expect consumer spending to improve in 2012, while 53 percent expect levels to remain the same. Forty-six percent of respondents believe 2012 will be a better year for business. "The survey revealed an increase in hiring intentions from small business owners - the largest we've seen in two years," said Raj Seshadri, head of small business banking at Citibank. "Whether it's confidence in consumer spending or planning for growth, our survey shows momentum for small businesses in 2012." This is also reflected in a rise in small business lending, as banks move to ease their credit decisions
amid a slightly lower risk environment. Last month, Citibank even reported it increased its lending to small firms by roughly $900 million in 2011 to reach a total of $7.9 billion. However, some analysts maintain that large banks such as Citi and Bank of America have only been lending to high-growth enterprises with large returns.