Small businesses are facing the most difficult business climate in the past three years, according to a new report from the National Small Business Association.

An online survey by the NSBA of 400 small-business owners shows 41 percent of small businesses are unable to garner adequate financing. Despite a slight increase in optimism just six months ago, small businesses today report decreases in nearly every indicator including business confidence, revenues, job growth, and growth projections.

"Today, more small businesses are unable to get financing than at any time in the last 17 years," said NSBA president Todd McCracken in a statement. "Given the direct correlation between access to capital and job growth, unless small-business owners are able to secure financing, we will continue to see high unemployment."

Only 11 percent of small businesses hired new employees in the last 12 months and the net number of employers who cut jobs was 25 percent, according to the report. Despite projections for the coming year faring better — a projected net increase of 5 percent — the majority project no growth in their number of employees.

Traditionally upbeat entrepreneurs have a far more negative outlook today than they had in the last several years. Nearly half do not believe there will be any growth opportunities for their business in the coming year and 41 percent have concerns about the ongoing viability of their business.

The majority of small-business owners (59 percent) expect the overall U.S. economy to be flat in the coming year, and 29 percent expect a recession.

Confusion over the new health care law plagues a significant majority of small businesses. In addition, the new 1099 reporting requirements stand to increase the average number of firms for which small businesses must file a 1099 report from an average of 10 to an average of 86.

"Amid all the financial concerns small-business owners face, the fact that Congress would approve this new, massively burdensome 1099 reporting requirement is unfathomable," said NSBA chair Larry Nannis, of Needham, Mass.-based CPA firm Levine, Katz, Nannis + Solomon PC.

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