While their concerns about credit availability have stabilized, fewer U.S. small-business owners expect revenues, cash flow, capital spending and hiring to increase over the next 12 months, according to a new survey.

The latest Wells Fargo/Gallup Small Business Index, conducted in July, found that the lower expectations for business prospects contributed to a 17-point decline from April in the survey's index of business owner confidence, finishing at (-28), the lowest score since the survey's inception.

"The weakened economy has been particularly hard on small businesses and our bankers are making every effort to help them through this period with financial solutions and guidance," said Marc Bernstein, executive vice president and Wells Fargo's head of small business. "We grew small-business lending by 30 percent over the previous quarter and —  in an effort to increase approvals —  took a 'second look' at declined applications, while continuing to apply our disciplined credit and underwriting principles."

Credit conditions improved modestly for businesses in July, with 32 percent of respondents reporting that credit was "somewhat" or "very difficult" to obtain over the past 12 months, down from 36 percent in April. Yet business owners expect credit to remain tight over the next 12 months as 42 percent expect credit to remain "somewhat" or "very difficult" to obtain, the same percentage reported in April and January 2010.

Thirty-eight percent of the survey respondents expect their companies' revenues to increase a lot or a little over the next 12 months, down from 48 percent in Q2 2010. Forty-three percent expect their companies' cash flow to increase, down from 53 percent in Q2 2010 (the lowest point in the survey’s history).

Thirty-seven percent expect their companies’ allocation for capital spending to decrease a lot or a little over the next 12 months, up from 29 percent in Q2 2010. Thirteen percent expect the overall number of jobs at their companies to increase, down from 18 percent in Q2 2010 (lowest point in survey history). Thirty-six percent rated their cash flow as somewhat or very good for the past 12 months, down from 42 percent in Q2 2010 (the lowest point in the survey’s history).

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