Inflation remains top operating issue for US small business owners

The NFIB Small Business Optimism Index rose 2.2 points in July to 93.7, the highest reading since February 2022. However, this is the 31st consecutive month below the 50-year average of 98. Inflation remains the top issue among small business owners, with 25% reporting it as their single most important problem in operating their business, up four points from June.

Seasonally adjusted, a net 33% reported raising compensation in July, down five points from June and the lowest reading since April 2021. A net 2% (seasonally adjusted) of owners plan inventory investment in the coming months, up four points from June. The last time inventory investment plans were positive was in October 2022.

The net percentage of owners expecting higher real sales volumes rose four points in July to a net negative 9% (seasonally adjusted), the highest reading of this year. The net percent of owners raising average selling prices fell five points from June to a seasonally adjusted net 22%.

Seasonally adjusted, a net 24% plan price hikes in July (down two points). This is the lowest reading since April 2023. Thirty-eight per cent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, up one point from June.

As reported in NFIB’s monthly jobs report, a seasonally adjusted 38% of all small business owners reported job openings they could not fill in their current period, up one point from June. Of the 57% of owners hiring or trying to hire in July, 86% reported few or no qualified applicants for the positions they were trying to fill.

Fifty-four per cent of owners reported capital outlays in the last six months, up two points from June. Of those making expenditures, 36% reported spending on new equipment, 22% acquired vehicles, and 15% improved or expanded facilities. 

A net negative 16% of all owners (seasonally adjusted) reported higher nominal sales in the past three months. The net percentage of owners expecting higher real sales volumes rose four points to a net negative 9% (seasonally adjusted), the highest reading of this year.

The net percentage of owners reporting inventory gains fell six points to a net negative 9%, the lowest since August 2020. Not seasonally adjusted, 11% reported increases in stocks, and 17% reported reductions. A net negative 4% (seasonally adjusted) of owners viewed current inventory stocks as “too low” in July, down two points from June. A net 2% (seasonally adjusted) of owners plan inventory investment in the coming months, up four points from June. The last time this was positive was in October 2022.

The net percentage of owners raising average selling prices fell five points from June to a net 22% seasonally adjusted. Twenty-five percent of owners reported that inflation was their single most important problem in operating their business. Unadjusted, 13% reported lower average selling prices and 36% reported higher average prices.

Price hikes were the most frequent in finance (57% higher, 6% lower), wholesale (47% higher, 9% lower), retail (40% higher, 14% lower), and construction (38% higher, 7% lower). Seasonally adjusted, a net 24% plan price hikes in July. This is the lowest reading since April 2023.

 

Scotiabank to acquire 14.9% equity interest in KeyCorp

Scotiabank has entered into an agreement to acquire an approximate 14.9% pro-forma ownership stake in KeyCorp through an issuance of common shares at a price of US$17.17 per share, representing an 11% premium to the volume weighted average price for the last 20 trading days. The total cash consideration is approximately US$2.8bn.

KeyCorp is a US-based financial services company operating across 15 states, with US$187bn in assets and approximately 1,000 branches offering commercial and retail banking and investment advice and services.

The investment will be completed in two stages - an initial investment of 4.9% and an additional investment of approximately 10%, for a total pro forma ownership of approximately 14.9%. The investment is expected to be accretive to earnings per share in the first full year following closing of the additional investment.

Subject to clearances and regulatory approvals, the initial investment of 4.9% is expected to close in the fourth quarter of fiscal 2024, and the additional investment of approximately 10% (for a total pro forma ownership of approximately 14.9%) is expected to close in fiscal 2025.

 

AKTG secures US$500m financing from Citi to fund continued expansion

Abercrombie & Kent Travel Group (AKTG) has announced that it has secured and signed a definitive financing agreement for up to US$500m to fund the continued expansion of its Abercrombie & Kent global travel business. The facility has been underwritten by Citi and enables the company to restructure existing legacy financing arrangements, not only consolidating them, but achieving improved lending terms. AKTG were advised by King & Spalding LLC and Citi were advised by Norton Rose Fulbright LLC in this transaction.

The funding is part of the “One A&K” strategy, which is focused on unifying every element of the business and improving the end-to-end product experience for consumers. As part of this growth,  Abercrombie & Kent will invest in expanding its owned assets, globally. This will result in new Destination Management Companies (DMCs) and physical assets such as camps, lodges, and riverboats, in existing and new markets. 

New DMCs are planned in Mexico and Indonesia this year, in addition to Abercrombie & Kent's existing 56 offices in 34 countries. New products have been created globally, from land-based itineraries to private jet journeys on the A&K jet. There are expedition cruises on all seven continents, with two new cruises launched this year. A new riverboat will launch in Peru next year, joining the company's current fleet of four riverboats in Egypt, and three expedition yachts in the Galápagos Islands under the Ecoventura brand. Abercrombie & Kent also has 12 camps and lodges in Africa, with a new one slated to open next year in Kenya's Amboseli.

The company is also investing in its back-office systems and creating a digital infrastructure, centred on a new Abercrombie & Kent global website, centralised booking system, travel advisor portal - all supported by a CRM platform.

“This transaction, facilitated by our strong partnership with Citi, is a step change for the Abercrombie & Kent Travel Group and our vision of "One A&K", creating a clear runway for us to further accelerate our growth path and expanding into more locations where we can continue to delight our guests,” said Andrew Burrett, CFO, AKTG.

 

Centime AP solution “pays businesses to automate”

Centime, a Boston-based fintech that offers cash management and banking solutions to small to midsize businesses (SMBs), has announced a solution designed to streamline the AP process and provide businesses with an opportunity to earn cash-back interest.

Although most finance professionals know that automating AP can reduce the administrative burden of manually processing invoices and payments, most AP bank accounts are non-interest-bearing, meaning valuable funds sit idle without generating any income.

The Centime solution that aims to counter this situation includes a high-yield bank account that earns the business cash back on AP spend. In a press release, the fintech said this solution helps businesses recoup the entire cost of Centime, and even turn a profit on their AP spend, in addition to the cost savings and efficiency gains from eliminating manual processing.

 

Stenn and Payyd bring invoice financing to India’s exporters

Working capital digital platform Stenn has partnered with Payyd to help support growth for Indian exporters. The collaboration delivers access to Stenn’s invoice financing, providing Payyd’s customers with on-demand capital through converting outstanding invoices into cash flow. 

Through the Payyd dashboard, an embedded two-step flow, customers can now select to finance their exports with Stenn. Payyd’s users operating in India will now be able to onboard via Payyd’s platform and access single invoice financing as and when they need. The non-recourse, single fee model offered by Stenn provides the flexibility for exporters to access additional capital when it matters most. 

“The traditional financing process for the world’s exporters simply isn’t fit for purpose - it’s lengthy, complicated, and overly technical,” said Pete de Souza, VP of Partnerships at Stenn. “India is at the heart of global trade and businesses need to be able to scale their operations quickly to meet customer demand, but they can’t achieve that if they’re hindered by late or slow payments.” 

 

Vantage Bank selects Unit for digital banking and innovation

Vantage Bank has selected Unit to support its expansion into embedded finance and reach new communities. The bank will use Unit’s infrastructure platform and technology to partner with software companies to embed Vantage Bank’s financial services directly into their products and diversify its delivery channels. 

Vantage will also leverage Unit’s oversight tools, digital core offering, dashboard, and white-label user interfaces to streamline operations, manage risk, and enhance efficiency.

“Vantage Bank has spent considerable time and effort developing a robust governance framework to offer embedded finance,” said Jeff Sinnott, CEO at Vantage Bank.  “We’re excited to work with Unit as our embedded finance accelerator.”

A statement announcing the collaboration said it will enable both entities to continue their commitment to responsible innovation and expanding financial access.