Guidant Financial and LendingClub Report on The State of U.S. Small Business In 2018

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Majority of small business owners continue to feel happy and confident in today’s uncertain political climate

Small Business Trends 2019

"The results from 2018 are reflective of the overall economy in many ways as we continue to work with entrepreneurs who believe that now is a good time to become a business owner,” said David Nilssen, CEO of Guidant Financial.

Overall, American small business owners are approaching 2019 with economic optimism and increased confidence in this lucrative environment, according to a survey from small business financing company Guidant Financial and online credit marketplace LendingClub Corporation (NYSE: LC). The companies surveyed more than 2,700 current and aspiring small business owners about their views on the current state of small business with questions ranging from their confidence in the economy to obstacles they faced pursuing business ownership.

Here’s a look at current small business trends and what to expect in 2019.

With very little change from year to year, most small business owners choose to go into business because they were “ready to be their own boss” (26 percent) or to “pursue their own passion” (23 percent).

Current business owners rated their level of happiness as an average of eight on a scale of one to 10 (10 being the happiest). A substantial 53 percent surveyed ranked their happiness at nine or above.

Small business owners are also confident in the state of small business in today’s political climate. Only 24 percent of small business owners surveyed rated their confidence under five on a scale of one to 10 (10 being the most confident). As in the previous year, the average small business owner’s answer on the confidence scale was seven.

Employee recruiting and retention grew as a challenge in 2018. Small business owners reported a significant 15 percent increase in challenges with recruiting and retaining employees. The majority of small business owners (41 percent) only employ two to five employees.

Similar to 2017, the majority of small business owners considered a lack of capital or cash flow one of their major challenges, followed closely by trouble with marketing and advertising, time management, and administration work.

Small business continues to be ruled by boomers. 57 percent of small business owners surveyed were over the age of 50, a small increase year over year. 73 percent are male and 25 percent female.

While the overall percentages of education in small business owners hasn’t changed dramatically from 2017, there are great shifts in the share of levels of higher learning. There was a 32 percent increase for doctorates and a 9 percent increase for Master’s degrees. Despite the changes, the largest segment of education remains at the high school level, at 33 percent.

78 percent of all respondents are currently profitable, a 6 percent increase from the previous year. A 37 percent majority are well-established entities with experienced owners that have been operating for over a decade. Half of profitable businesses were purchased as an independent business already in operation, while independent start-up businesses were the next largest segment, at 39 percent.

Top Business Industries
2018 brought a notable increase in health, beauty, and fitness businesses such as wellness spas, salons, and gyms with a 34 percent increase. There was a rise in food businesses and restaurants, a 14 percent increase. Business services continued to reign as the largest segment, at 11 percent. Home services overtook automotive businesses this year for the 5th spot.

While the top five forms of funding remained the same as 2017, there were numerous shifts in less-utilized forms of financing. The share of mortgage refinancing increased by 33 percent, SBA loans grew by 29 percent, and home equity line of credit (HELOC) grew 27 percent.
Cash remains the most popular funding method with 32 percent. Rollovers for Business Start-ups (ROBS), a method of using retirement funds to start a business without incurring tax penalties, remains in second place at 13 percent.

The survey yielded valuable trend information on the U.S. small business economy.

Key takeaways include:

  • 78% businesses profitable
  • Happiness average 8 / 53% business owners at 9+
  • Confidence in political climate average 7 / 48% increase in owners at 8+
  • 33% had only a high-school degree, showing a degree isn’t necessary to be a successful small business owner
  • #1 reason people go into business – “Ready to be their own boss” with 26% of the share and not far behind is those that “wanted to pursue their own passion” at 23% of the share
  • 15% increase in employee recruiting and retention challenges
  • 34% increase of health, beauty, and fitness businesses
  • 57% of small business owners are boomers aged 50+, 25% are aged 40-49, and 18% are millennials aged 18-39

"The results from 2018 are reflective of the overall economy in many ways as we continue to work with entrepreneurs who believe that now is a good time to become a business owner,” said David Nilssen, CEO of Guidant Financial. "Small businesses are taking advantage of economic growth to advance their dreams.”

“Through policy recommendations and our work with the Responsible Business Lending Coalition, LendingClub has been a staunch advocate for small businesses since 2014 when we began facilitating small business loans,” said John Spottiswood, GM of LendingClub Business Loans. “We know these hard-working owners need access to affordable and fair credit to thrive and we’re proud to support these entrepreneurs.”

Guidant Financial and LendingClub are small business financing experts committed to making access to capital seamless and affordable. Together, they've provided access to nearly $4.5 billion to thousands of new business owners.

An accompanying infographic can be found at

Between November 6, 2018 and November 16, 2018, Guidant Financial and LendingClub conducted an email survey of more than 2,700 male and female small business owners and aspiring entrepreneurs from the continental U.S., Alaska, and Hawaii. Ages of respondents ranged from 18 to over 70.

About Guidant Financial
Headquartered in Bellevue, WA Guidant Financial helps business owners secure financing to start, buy or grow a business. An industry leader in business and franchise financing, Guidant works with new and existing entrepreneurs to identify, evaluate and deploy customized financing solutions. Their services include, but are not limited to, 401(k) business funding, SBA loans, unsecured credit, and portfolio loans. In total, Guidant has helped over 20,000 entrepreneurs in all 50 states to invest more than $4 billion in funds to start small businesses, resulting in more than 85,000 U.S. jobs created. Visit Guidant on the web at

About LendingClub
LendingClub was founded to transform the banking system to make credit more affordable and investing more rewarding. Today, LendingClub's online credit marketplace connects borrowers and investors to deliver more efficient and affordable access to credit. LendingClub's technology platform creates cost efficiencies, which are passed onto borrowers as savings in the form of lower rates and to investors in the form of risk-adjusted returns. LendingClub is based in San Francisco, California. Loans made by WebBank, member FDIC.

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Stacia Kirby
Kirby Communications
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