Small Businesses Cautiously Optimistic about Their Future Despite Economic Challenges, According to Visa USA Study

U.S. Small Business Owners Express Concern about the Rising Cost of Energy, Rent/Mortgages and Acquiring New Customers, Keep Watchful Eye on Capital Expenditures

SAN FRANCISCO, September 5, 2007

U.S. small businesses are cautiously optimistic about their business prospects, but remained concerned about the increasing costs of energy, rent and mortgages, according to the Visa Small Business Spend Insights report.

For the second quarter of 2007, Visa found that nearly half of the small business owners surveyed expect an increase in profit and revenue over the next six months. The report, which is published quarterly, provides an overall view of the U.S. small business climate by combining a poll of U.S. small businesses with the most current Visa spending data on small business cards.

"Small business owners are clearly anxious about rising costs and are addressing this issue by focusing on improving their short-term cash flow in these challenging economic times," said Raghav Lal, senior vice president, Small Business Products, Visa USA. "Visa small business solutions may enable companies to better monitor expenses, improve cash flow and take advantage of rewards programs tailored to their individual preferences."

Small Business Profit & Loss Overview
The report results indicate small business owners believe that the outlook for revenue, profits and cash flow is positive, based on the following key findings:

Nearly half (44 percent) of small business owners surveyed expected an increase in revenues over the next six months, while only 13 percent expected revenue to decrease in the same period.
40 percent of small business owners surveyed expected an increase in profits over the next six months, while only 22 percent expected lower profits over the same period.
Small businesses expect borrowing to remain low. Only 19 percent expect to borrow money to enhance cash flow over the next six months.

Small business optimism is somewhat tempered by concerns about rising costs. This quarter's report found that energy remains an area of concern, with 72 percent of surveyed small business owners anticipating an increase in energy spending over the next six months.

This quarter's survey reveals that 23 percent of small business owners are concerned that rent and mortgage costs will rise in the near future. Sole proprietors demonstrated the largest shift in concern.

Meanwhile, 23 percent of small business owners surveyed expressed concern about attracting new customers over the next six months. The average spend per transaction on Visa Business cards for advertising, management consultants/public relations, publishing and related expenses increased by 8 percent for the 12 months ending June 2007.

Finally, 58 percent of small business owners surveyed expect to slow large capital investments, while 41 percent expect to slow small capital investments.

"More than most, small business owners are sensitive to the changes in the economic climate and are prudently expecting to make real-time adjustments, such as reducing capital expenditures, in order to increase short-term cash flow," Lal said. "This increase in cash should be available to fund investments in current business challenges, such as attracting new customers."

For more information on Visa Small Business Solutions or to view the complete Visa Small Business Insights newsletter, go to www.usa.visa.com/business.

About Small Business Spend Insights
Visa Small Business Spend Insights is a quarterly survey to monitor the relative economic confidence of small businesses with $50,000 - $25,000,000 in annual revenue. More than 600 small businesses are included in the quarterly survey.

About Visa USA
Visa USA is a leading payment brand and the nation's largest payment system, enabling banks to provide their consumers and business customers with a wide variety of payment alternatives tailored to meet their evolving needs. Visa USA is committed to increasing the choice, convenience, acceptance and security of Visa payments for all stakeholders in the payment system -- members, cardholders and merchants. Through its 13,320 member financial institutions, more than 520 million Visa-branded cards have been issued to cardholders in the United States.

Visa products generated nearly $1.8 trillion in total volume in the United States through March 2007 and enjoy unsurpassed acceptance around the globe. For more information, visit www.visa.com/media

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