Economic optimism is now trickling down into private businesses, sending a strong signal that the economic recovery is on and beginning to pick up steam.

Bank of America / Merrill Lynch Business Capital, conducted an independent survey of more than 800 CFO’s of companies with annual revenues between $25 Million and $2 Billion. The results were very encouraging:

• 64%  expect revenue growth
• 47%  plan to hire additional employees
• 55%  expect increased profit margins
• 33%  will increase capital expenditures

According to CFO survey respondents, the economy and manufacturing sector are showing signs of stability and steady recovery compared to views for the services and commodities, which indicate outright growth and a more robust turnaround.

On the M&A front, 26% of all company CFOs expect to participate in a merger or acquisition in 2011, a finding that is consistent across both manufacturing (25%) and services and commodities (27%) sectors. Among those companies expecting M&A activity, the overwhelming majority (91%) report that they will be making the acquisition, while only 4% say that they expect to be acquired.

As we expect an increased wave of new strategic buyers in the private marketplace, coupled with the low cost of funds and the extension of the “Bush-era” tax cuts, this overall market atmosphere will most likely radiate a strong “bullish” trend on small and mid-sized business values.