Despite improved sentiment, small business owners concerned about the future

Although there are a few obstacles holding the economy back from making an all-out recovery, a growing share of small business owners felt more optimistic about the future in April.

According to the most recent Wells Fargo/Gallup Small Business Index, owner sentiment improved seven points to a mark of positive 16 last month, up from positive nine in January and minus 11 in November last year.

"Small business owners, who now have stronger cash flow than at any time since the start of the Great Recession, tell us they're focused on generating more steady sales, and many are holding off making investments in their business until that happens," said Wells Fargo head of Small Business Marc Bernstein.

The biggest concern to small business owners continues to be the issue of attracting new business, the survey found. Roughly 21 percent of companies with fewer than 100 employees felt this way.

During a period of reduced cash flow, it can be difficult for some retailers to keep their shelves stocked, which can drive away prospective business. Luckily, by utilizing their current inventory, these companies could take advantage of inventory financing to establish a revolving line of credit and maintain an inventory to attract additional customers.

However, attracting new business isn't the only concern held by small business owners. In addition, uncertainty about government regulations is on the minds of 10 percent of small businesses, while concerns about a weak economy are troublesome to 9 percent.

Borrowing money from banks has also been a concern for many small- and medium-sized businesses, according to the Reuters/PayNet Small Business Lending Index. In March, the measurement fell to an index of 98.5, from 105.4 in February. The index level is determined by examining both small business borrowing rates as well as loan delinquencies. Many experts speculate this could be the result of fewer banks willing to take risks. Fortunately, inventory financing may be available to small- and medium-sized businesses when a bank says "No."