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Get Started: Entrepreneurship on the rise again, study says

June 6, 2016

ENTREPRENEURIAL COMEBACK

The rate of entrepreneurship in the U.S. rose last year, ending a decline that began in 2010, according to a study by the Kauffman Foundation, which researches entrepreneurship.

Kauffman counted 310 new entrepreneurs per 100,000 adults, up about 10 percent from 280 in 2014. The 2015 figure translates into about 530,000 new business owners each month.

Entrepreneurship slowed as a result of the recession, not only due to caution from would-be entrepreneurs, but also because loan and investor money has been harder to come by. Other loan issues have held back entrepreneurs: Home-equity lines of credit that many people used in the past to start companies have shrunk as bankers grew more leary. And many people with tens or hundreds of thousands of dollars in school loan debt can’t afford to start companies while they have steep monthly payments.

Kauffman said the increase in entrepreneurship is a good sign for more job creation and economic. However, many startups don’t hire immediately, and the weakness of the economy this year has helped keep small business hiring in check. The gross domestic product grew at a weak annual rate of 0.8 percent during the winter.

MORE SIGNS OF CAUTION

Small businesses keep scaling back their borrowing as they decide it’s best to be wary in a weakening economy.

The Thomson Reuters/PayNet Small Business Lending Index fell 5 percent to 129.0 in April from 135.1 in March, and was also down 8 percent from a year earlier. The decline was the second straight in the index, which tracks small business loans and leases.

The drop in borrowing coincided with a drop in small business hiring from early 2015 levels. Owners have said in recent surveys they’re losing confidence in the economy, and are more uncertain about their own revenue. They’ve also said since the recession that they wouldn’t hire unless their revenue was strong enough to justify taking risks like hiring. And because many are not expanding their companies, they don’t need to borrow.

NEW OVERTIME RULES

Employers who need information about the Labor Department’s new overtime regulations can get some help from an online seminar this Thursday sponsored by SCORE, the organization that offers free counseling to small businesses. The rules expand the number of workers eligible for overtime. The seminar will be held at 1 p.m. Eastern time. Learn more and register at http://tinyurl.com/j4ll9qv

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Follow Joyce Rosenberg at www.twitter.com/JoyceMRosenberg . Her work can be found here: http://bigstory.ap.org/content/joyce-m-rosenberg

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