In a sign the economy has a long way to go, U.S. small business owners’ confidence hit its lowest point in 29 quarters, according to the latest Wells Fargo/Gallup Small Business Index, conducted in July.

The index, which polled more than 604 owners by telephone nationally, revealed that fears about credit availability have stabilized, but U.S. small business owners have lower expectations for their businesses, with fewer expecting revenues, cash flow, capital spending and hiring to increase over the next 12 months. These lowered expectations contributed to a 17-point decline from April falling to -28 in July, the lowest score since the survey's inception. The index is calculated based on a company’s present situation and future expectations.

“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, in a press release.

Bernstein said the company grew small business lending by 30% over the previous quarter and even took a “second look” at declined applications to try to increase approvals.
Meanwhile, credit conditions improved for businesses in July with 32% of respondents reporting that credit was “somewhat” or “very difficult” to obtain over the past 12 months, down from 36% in April. But 42% expect credit to remain “somewhat” or “very difficult” to obtain, the same percentage reported in April and January.

“Slower consumer spending growth appears to be weighing on small business confidence,” said Scott Anderson, Wells Fargo senior economist, in a press release. “Small businesses are scaling back on hiring and capital spending plans in the third quarter and remain concerned about the overall financial health of their companies.”

Some key findings include: 38 % expect their companies' revenues to increase a lot or a little over the next 12 months, down from 48 percent in the second quarter; 43%  expect their companies' cash flow to increase, down from 53% in the second quarter; 37% expect their companies' allocation for capital spending to decrease a lot or a little over the next 12 months, up from 29% in the second quarter; 13% expect the overall number of jobs at their companies to increase, down from 18% in the second quarter; 36% rated their current cash flow as somewhat or very good for the past 12 months, down from 42% in the second quarter.