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Many small firms feel better about 2013

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Business insurance policies provided small firm owners with a sense of protection during the recession when many felt like they were at risk of going under water, but they also can help firms stay safe when they are trying  to grow. The recent improvement of the economy and improved optimism has got small-business owners feeling good about the prospects for the rest of the year.

Small-business owners are optimistic
Recent research from business financing solutions provider Direct Capital showed 53 percent of small firms think they are in better shape in 2013 than in the previous year. Meanwhile, 21 percent stated they have experienced no change and just more than one-quarter are doing worse when compared to 2012.

An indicator that companies have improved prospects is their request for loans. Direct Capital's Monthly Small Business Lending Index has found the demand for funds has increased for the past five months. Small-business owners who are prepared to take on loans will normally have optimism for their firms in the upcoming months and even years.

"We have seen strong lending demand this year and now and more than half of the business owners we polled are saying things have improved this year," said Stephen Lankler, senior vice president at Direct Capital. "Those continue to be good signs for the small business economy. "

Small businesses adding employees
Many experts believe that small businesses are the lifeblood of the economy, and when they are hiring, companies should be less hesitant to enact their growth strategies. The most recent employment index by Intuit Online Payroll and QuickBooks Online Payroll revealed small firms added 35,000 new jobs in May and employment grew 0.18 percent, leading to an annualized growth rate of 2.1 percent.

"The small business economic picture remains conflicted," said Susan Woodward, the economist who worked with Intuit to create the indexes. "While May's small business employment figures are the best we have seen since January 2012, small business revenues have continued to decline month over month on a per-business basis."

While revenues have decreased in recent months, small firms are keeping their wages consistent. The index showed average compensation remained steady in May at roughly $2,696 per month. With hiring up slightly, small-businesses are going to need to get revenues to increase to pay new workers.

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