Small-business owners' confidence in the economy rebounded this month after hitting a record low last month, according to Discover Financial Services.

The Riverwoods, Ill., company said Monday that its Small Business Watch index, which was pegged at 100 at its launch in 2006, climbed 12.8 points this month from June, to 84.6.

A third of the 1,000 small-business owners surveyed by Discover said they had experienced cash flow issues in the last 90 days, versus 42% last month. Also, 28% said economic conditions for their business were picking up, compared with 23% last month.

The percentage of respondents who said they think the economy is getting better nearly doubled, to 17%, and the percentage who rated the economy as good or excellent rose 5 points, to 17%.

Forty-two percent of respondents said the housing market's slump has hurt business, and 27% said they had extended credit to customers in the past month.

"As shifts in the housing and credit markets continue to impact consumers' spending habits, small-business commerce will likely experience a slowdown," said Ryan Scully, Discover's director of business credit cards. "Even though small-business owners are seeing customers delaying their credit payments, it doesn't appear to be having a negative impact on their cash flow."


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