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Small Business Focus

Small Business Credit Survey

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The Small Business Credit Survey (SBCS) is a national collaboration of the 12 Reserve Banks of the Federal Reserve System that provides intelligence on small business financial needs, decisions and outcomes to policymakers, researchers and service providers. 

Established in 2010 by the New York Fed, the Small Business Credit Survey (SBCS) is a survey of firms reporting information about business performance, financing needs and choices, and borrowing experiences. The SBCS captures the perspectives of businesses with fewer than 500 employees and results are weighted to reflect the full population of small businesses in the covered states.

In 2014, the Atlanta, Cleveland, New York, and Philadelphia Reserve Banks collaborated on the survey and received 2,000 responses from small businesses in 10 states.

In 2015, the Boston, Richmond and St. Louis Feds joined the effort and over 5,400 responses were received from small businesses in 26 states.

The 2016 survey was the first iteration conducted on a national scale with involvement from all 12 Federal Reserve Banks and input collected across all 50 states and the District of Columbia. Over 15,990 responses were received, of which 10,303 were from employer firms.

The survey covers several key areas:

  • Firm performance and challenges: Changes in annual revenue, number of employees, outlook for the business, challenges facing the business.
  • Financing and credit: Sources of financing, credit products utilized, experiences applying for and obtaining credit.
  • Demographic information: Firm zip code, industry, size, number of employees, etc.

Results of the survey, conducted annually in the fall, help policymakers to better understand the changing dynamics in the small business credit environment

Employer Firms


The “2017 Small Business Credit Survey: Report on Employer Firms” was recently issued by the 12 Federal Reserve Banks. The Report examines the results of an annual survey of small business owners nationwide and focuses on employer firms with fewer than 500 employees.

The report found:

  • Firms’ profitability, revenue growth and employment growth improved.
  • Optimism about future performance reached its highest level in several years.
  • More firms received all of the financing requested.
  • A significant portion of firms did not apply for credit because they already had sufficient financing.
  • Lower revenue generating firms, startups and those in the leisure and hospitality industry continued to struggle acutely with financing challenges.

You can find more information on the  Reserve Banks’ new website, FedSmallBusiness.org, which serves as a hub for small business research and analysis.

Employer Firms


The Employer Firm Report presents findings on the business conditions, financing needs and access to capital based on the responses of 10,303 employer firms from all 50 states and the District of Columbia.

Key Findings:

  • Although many employer small businesses were profitable and optimistic, a significant majority faced financial challenges, experienced funding gaps and relied on personal finances.
  • These issues were even more pronounced for the smallest firms, which were less likely to receive necessary funding and more likely to rely on personal finances to operate.
  • These findings highlight small businesses’ obstacles to growth and raise new questions about how to overcome them.

The results are weighted to reflect the full population of small businesses nationally. The survey is not a random sample; therefore, results should be analyzed with awareness of potential methodological biases.

Full report

Survey Questionnaire

Report Appendix

 

Fifth District Report 


2016 Small Business Credit Survey: Report on Employer Firms in the Fifth District
pdf report

This report presents results for the Fifth District overall, as well as for Maryland, North Carolina, South Carolina, and Virginia individually. The District of Columbia and West Virginia were not included in this analysis due to small sample sizes. We found that the majority of Fifth District employer firms are under 10-years-old, have fewer than five employees, operate in the service industry, have low credit risks, and earn under $1 million in revenue. In addition, they are more optimistic about future growth, more likely to use contract workers and more likely to receive funding from large banks compared to their counterparts across the country.

 

Startup Firms


2016 Small Business Credit Survey: Report on Startup Firms

 

Minority-owned Firms


2016 Small Business Credit Survey: Report on Minority-owned Firms
pdf report | appendix data

This report is the third in a series of reports based on the 2016 SBCS, offering unique insight into important, often underserved, segments of the small business population. Results show that minority-owned firms are discouraged (i.e., they did not apply for new funding because they did not think they would be approved) at much higher rates than nonminority-owned firms. In addition, while not controlling for all firm characteristics, the reported credit outcomes of survey respondents differ by race and credit risk.

 

Microbusinesses 


2016 Small Business Credit Survey: Report on Microbusinesses: Nonemployer and Small Employer Firms 
pdf report | appendix

The fourth in a series of reports based on the 2016 Small Business Credit Survey (SBCS), this report details findings on the financing experiences and outcomes of the smallest firms in the US. Microbusinesses—a category of small firms comprising both nonemployer firms and firms with fewer than 5 employees—account for 9 in 10 firms in the US. The SBCS finds that microbusinesses face greater challenges than larger small firms and are less able to access financing.

 

Women-owned Firms


2016 Small Business Credit Survey: Report on Women-owned Firms
pdf report

The fifth in a series of reports that examine the results of an annual survey of small business owners, this report focuses on small businesses that had majority female ownership—51% or more ownership by women—and employees in 2016 (hereafter “women-owned firms”). It compares these firms’ experiences with those of majority men-owned firms (“men-owned firms”). Women-owned firms were found to more likely stay small in terms of revenue and employment, struggle with profitability and be concentrated in less capital-intensive industries. In financing these small businesses, women-owned firms were more likely to face growth-related financial challenges, hold smaller amounts of debt and have unsecured debt. Though women- and men-owned firms applied for credit at similar rates, women-owned firms were less successful in obtaining financing. Among non-applicants, women-owned firms were more often discouraged from applying and less likely to have sufficient credit.

 

Rural Employer Firms


2016 Small Business Credit Survey: Report on Rural Employer Firms
pdf report

This Report on Rural Employer Firms compares the business and financing conditions of small employer firms located in rural areas to those located in urban areas. It is the sixth in a series of reports based on the 2016 Small Business Credit Survey (SBCS), an annual survey of small business owners. Compared to firms located in urban areas, results show that firms in rural areas are more stable and face less financing constraints. Small banks play a bigger role in rural areas, too.

Employer Firms


The Employer Firm Report presents findings on the business conditions, financing needs and access to capital based on the responses of 3,459 employer firms from a 26 state coverage area.

Key Findings:

  • Half of applicants received all the credit sought.
  • Newer and smaller firms were more likely to report credit shortfalls.
  • Cash flow was the top business challenge for small firms.
  • Small banks are the lender of choice.
  • Online lenders are a common source of financing – but have lowest borrower satisfaction levels.

Results are weighted to reflect the full population of small businesses in the 26 states of coverage: New York, Florida, Massachusetts, North Carolina, Georgia, Ohio, Pennsylvania, Arkansas, Tennessee, Alabama, Connecticut, Illinois, Indiana, New Jersey, Kansas, Mississippi, Missouri, South Carolina, Virginia, Kentucky, Louisiana, Maine, Maryland, California, Colorado and Texas.

Full Report

Data

Survey Questionnaire

 

Self-Employed


2015 Small Business Credit Survey: Report on Nonemployer Firms

Key Findings:

  • Large differences in credit demand exist between small and larger revenue firms.
  • Small businesses applying for credit are likely to be experienced in acquiring financing and operating at a profit.
  • Among applicants, there is a strong demand for small loans of $100,000 or less, with many firms borrowing to expand.
  • A tough credit market exists for the smallest firms and startups, with a majority unable to secure any credit.
  • Large banks are the dominant credit sources, but the use of online lenders is common across firm segments.

Results are weighted to reflect the full population of small businesses in the ten states of coverage: Alabama, Connecticut, Florida, Georgia, Louisiana, New Jersey, New York, Ohio, Pennsylvania and Tennessee.

Full Report

Data

Survey Questionnaire  

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