North Bay small-business owners seem to be a bit more hopeful about their revenue and hiring projections for this year than others in California, but fewer locally plan to seek larger quarters for their operations, based on a new survey by a major lender to such ventures.
Two in three operators of small businesses in the six North Bay counties expect 2017 revenue to increase, and the other third forecast at least as much will come in as last year, according to TMC Financing’s 2017 Small Business Outlook Survey. That’s compared to 64 percent of those elsewhere projecting increases, 32 percent the same and 4 percent decreases.
The certified development company for U.S. Small Business Administration financing surveyed 1,500 businesses in California and Nevada in November and received 227 responses, with 139 from the Bay Area and 15 from the silver state.
But respondents from Sonoma, Solano, Marin, Napa, Mendocino and Lake counties were more likely to have no revenue growth last year from 2015 than firms elsewhere, with North Bay gains and losses more muted. Thirty percent of North Bay respondents had no change, compared with 24 percent unchanged elsewhere. The spread for North Bay revenue gains to declines was 60 percent to 10 percent, compared with 62 percent to 14 percent outside the subregion.
On hiring, North Bay small firms were slightly more interested than others in keeping their workforce the same (57 percent to 53 percent) but less in adding staff (43 percent to 44 percent) and cutting (zero to 3 percent).
As for real estate needs, North Bay firms were less noticeably less interested in adding more space than companies elsewhere (15 percent vs. 23 percent).
Last year, TMC said it funded $15.74 million toward SBA 504 loans for commercial real estate projects in the North Bay. Such loans require a portion to be funded by a conventional lender. TMC projects the North Bay loans will create or retain 176 jobs in the next two years, up from 168 projected from 2015 lending of $13.96 million.
Industries with the greatest growth in projected job creation from those North Bay loans include recreation, food services, construction, warehousing and manufacturing, according to the company.
TMC highlighted one of its borrowers, EO Products, a certified organic manufacturer of personal care products and cosmetics based in San Rafael. It employs 105, with 40 percent of manufacturing jobs filled by individuals without a college degree.
EO’s 504 financing is projected to create 30 additional jobs in the next two years and 120 jobs in the next four years. It is estimated that 40 percent of the projected jobs will be filled by individuals without college education.
In California and Nevada, TMC’s portion of 504 loans totalled more than $700 million, estimated to create or retain 3,390 jobs, a 51 percent increase over 2015.
TMC Financing is said to be the largest provider of SBA 504 commercial real estate financing in Northern California and Southern Nevada.
How small businesses see the economy
2017 projected revenue
Increase: 67% North Bay, 64% Calif./Nev.
Same: 33% North Bay, 32% Calif./Nev.
Decrease: 0% North Bay, 4% Calif./Nev.
2016 vs. 2015 revenue
Increased: 60% North Bay, 62% Calif./Nev.
Same: 30% North Bay, 24% Calif./Nev.
Decreased: 10% North Bay, 14% Calif./Nev.
2017 employment plans
Hire: 43% North Bay, 44% Calif./Nev.
Maintain: 57% North Bay, 53% Calif./Nev.
Reduce: 0% North Bay, 3% Calif./Nev.
2017 growth plans
Expand business space: 15% North Bay, 23% Calif./Nev.
Refinance business loans: 14% North Bay, 20% Calif./Nev.
Source: TMC Financing 2017 Small Business Outlook Survey, November 2016, 227 total responses including 139 from the Bay Area and 15 from Nevada.