The percentage of small-business owners expressing confidence about the economy dropped again this month, after a brief rebound in July, according to Discover.

In a survey of 1,000 small business owners nationwide, 36 percent said they felt economic conditions for their businesses were getting better, down from 41 percent in July, and another 41 percent said they have experienced more cash-flow issues in the past three months, compared to only 35 percent in July.

Overall, Discover's monthly small-business confidence index dropped almost five points in August to 102.4 and is in-line with June's report as the lowest index on record since its launch in August 2006.

Additionally, 35 percent of small-business owners said that recent changes in the housing market have negatively impacted their business, making it harder to secure credit. Twelve percent of business owners said they have applied for credit in the past three months. If obtaining credit becomes more difficult, more than one-third of business owners said it will have an impact on their business.

Shifts in the housing market are also having an affect on consumer's budgets, which in turn could continue to impact small-business owners, according to Sastry Rachakonda, the director of Discover's small-business credit card.

On the upside, 69 percent of business owners plan to keep their businesses small, and at least 38 percent said they do not plan to retire. "These numbers are in line with the Watch last year," Rachakonda said in statement, "and it demonstrates the pride small business owners have in their businesses."

Published on: Aug 27, 2007