New Wells Fargo/Gallup Survey: Majority of Small Business Owners Struggle to Offer Employees Healthcare Slight Increase in Index Score Signifies Optimism, However, Lack of Business, Cash Flow and Healthcare Still Critical Issues for Business Owners SAN FRANCISCO, March 16 /PRNewswire-FirstCall/ -- Affordable healthcare remains a significant issue for small business owners, according to the latest Wells Fargo/Gallup Small Business Index. Three in four small business owners are dissatisfied with the healthcare system in the United States today, and say it needs either major changes or a complete overhaul. Additionally, seventy-one percent of small business owners surveyed in Q4 2004 cited this as a critical priority for Congress and the President to address. While the number of small business owners offering employee healthcare coverage increased from 2003 to 2004, more than fifty percent still do not provide healthcare for their employees. Of those, twenty-two percent also do not have personal health insurance. With the number of U.S. small businesses estimated at well over 20 million, this means that approximately three million business owners are not covered for major medical emergencies. "We want to provide our employees with a sense of security for their well-being," said Ruth Lopez Novodor, Co-CEO of Beverly Oncology & Imaging Medical Group. "Without more options for providing reasonably-priced healthcare, many business owners risk losing our most valuable resources -- our employees. This puts the future success of our businesses at risk." Six in ten small business owners surveyed who do not provide health insurance to their employees said they would be more inclined to do so if government incentives were available. Twenty-three percent have curtailed hiring and twenty-seven percent have cut back on non-capital investments due to rising healthcare costs. "Though small business owners remain optimistic about their future business success, these healthcare findings illustrate the challenges faced by small business owners," said Rebecca Macieira-Kaufmann, small business segment manager for Wells Fargo. "The cost of healthcare is a major concern, and these findings show the need for solutions that allow more small business owners to be able to provide health insurance for their employees." The Index score increased seven points, from 99 in Q3 2004 to 106 in Q4 2004. Despite a slight increase in overall optimism, business owners still cite lack of business, financial resources/cash flow, and health care costs as the most important problems facing their companies. These issues have consistently been among the most pressing according to business owners since the first Index results were tracked in September of 2003. The goods sector, traditionally most susceptible to change, saw the largest sector increase with a 57-point Index gain from Q3 to Q4 2004. All other sectors showed little change from the previous quarter. Regionally, the West and East regions both showed a significant decline (21 and 13 points respectively), while the Midwest and South both rose over 20 points. The Midwest and South scores are most likely related to the increase in the goods sector. The Index tracks six key measures for both current conditions and future expectations as reported by small business owners: current financial situation, revenues, cash flow, capital spending, number of jobs, and credit availability. About Wells Fargo Wells Fargo & Company is a diversified financial services company with $428 billion in assets, providing banking, insurance, investments, mortgage and consumer finance to more than 23 million customers from more than 6,000 stores and the internet (wellsfargo.com) across North America and elsewhere internationally. Wells Fargo Bank, N.A. is the only "Aaa"- rated bank in the United States. Providing financial products and services to more than one million businesses with annual sales up to $20 million in all 50 states, Puerto Rico and Canada, Wells Fargo is the #1 lender to small businesses in the United States in total dollar volume according to the most recent CRA data (2003). The second largest national SBA lender in dollars, Wells Fargo is an SBA Preferred Lender in 28 states, and originated 3,555 loans for $495 million in 2004. Wells Fargo has also been ranked the number one SBA 504 lender nationally for the last two years. Its targeted business services programs provide outreach and education to women, African American, Latino, and Asian business owners about financial services. Since 1995, Wells Fargo has loaned more than $23 billion to women and minority business owners. About the Gallup Organization For more than 60 years, the Gallup Organization has been a recognized leader in the measurement and analysis of people's attitudes, opinions and behavior. While best known for the Gallup Poll, founded in 1935, Gallup's current activities consist largely of providing marketing and management research, advisory services and education to the world's largest corporations and institutions. DATASOURCE: Wells Fargo & Company CONTACT: Sarah Pew of Wells Fargo & Company, +1-415-396-0866, or Web site: http://www.wellsfargo.com/

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