SOURCE: BMO Harris Bank

BMO Harris Bank

March 13, 2014 09:15 ET

Majority of Minnesota Businesses Plan on Investing in Their Business in 2014 - BMO Harris Bank Study

MINNEAPOLIS/ST. PAUL, MN--(Marketwired - Mar 13, 2014) -

  • 58 percent of Minnesota respondents plan on investing in their businesses in 2014
  • 36 percent plan to hire more employees
  • 30 percent plan to upgrade or purchase new equipment

BMO Harris Bank released a study today that found that 58 percent of Minnesota business owners/executives plan on investing in their business in 2014. Adding employees and new equipment, top the list of planned investments.

"The fact that so many businesses are planning to expand in 2014 demonstrates the optimism in our area," said Todd Senger, Minnesota Regional President, BMO Harris Bank. "We're seeing businesses feeling confident enough to invest in their operations and people."

When business owners/executives were asked where they would make those business investments:

  • 36 percent plan to hire more employees, compared to 26 percent nationally
  • 30 percent said they would upgrade or purchase new equipment
  • 18 percent plan to modernize technology and systems
  • 15 percent plan to increase spending on employee training
  • 15 percent are looking to increase spending on employee training

"These numbers shouldn't come as a surprise," added Jud Snyder, Managing Director and Head, BMO Harris Equipment Finance Company. "They reflect what we've seen over the past 18-24 months, with companies making more investments in capital expenditures for both maintenance and expansion."

Forty-two percent of Minnesota respondents were not planning to make business investments in 2014. The most popular reason cited for not investing (21 percent) is lack of capital.

Financing Options Vary

As for funding, more than two-thirds (68 percent) of those planning to make investments in their business say they will do so with cash reserves. Only 5 percent plan to fund the investments entirely through borrowing, while 26 percent plan on doing a combination of both.

"These findings demonstrate that the business community continues to be conservative with the use of debt for funding growth -- stemming from what they learned during the recent recession," added Snyder. "However, intermediate-term borrowing should still be strongly considered as an option for financing growth with interest rates still at historic lows."

National Results from the Survey
When business owners/executives throughout the country were asked about their investments for 2014, the results were:

  • 64 percent of respondents are planning to invest in their business this year
  • That number increases to 82 percent of owners of businesses with revenues over $20 million per year
  • When asked where they were making investments, owners responded
    • 42 percent said they would upgrade or purchase new equipment
    • 26 percent plan to hire more employees
    • 25 percent were focused on modernizing technology and systems
    • 24 percent planned on expanding operations

For more commentary on the survey findings, visit the BMO Harris Commercial Bank Resource Center:

The survey was conducted by Pollara with an online sample of 601 American business owners in November, 2013. A probability sample of this size would be accurate to +/- 4%, 19 times out of 20.

About BMO Harris Bank
BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. BMO Harris Bank provides a broad range of personal banking products and solutions through over 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Arizona and Florida. For more information about BMO Harris Bank, go to the company fact sheet. Deposit and loan products and services provided by BMO Harris Bank N.A. BMO Harris® and BMO Harris Bank® are trade names used by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with approximately 1,600 branches, and approximately CDN $593 billion in assets (as of January 31, 2014).

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