Lift Up the Needs of Small Business Owners Through the Federal Reserve’s Small Business Credit Survey

Authors

Crystal Theresa Ejanda

Small businesses play an important role in the American economy, both as employers, and as drivers of economic activity in local communities. In recent years, many small business owners have had to navigate multiple challenges, including the COVID-19 pandemic and increasing costs.   

In 2023, many small employer firms across the 9 western states reported that they were struggling with increased costs and hiring staff, though there were signs of optimism as well:   

  • Top-cited challenges for small businesses in the 12th District include issues with reaching customers and growing sales (identified by 58% of respondents), followed closely by hiring/retaining qualified staff (identified by 51% of respondents)   
  • Increased costs of goods, services, and/or wages was by far the top-cited financial challenge, as noted by 78% of 12th District businesses. 
  • Of the employer firms that sought some type of financing, 63% did so to meet operating expenses, while 46% sought funding for business expansion, to pursue a new opportunity, or to acquire business assets.  

This information comes from the Federal Reserve’s annual Small Business Credit Survey (SBCS).  Conducted through a collaboration of the 12 Federal Reserve Banks, the SBCS is a national survey that collects data on small businesses’ financial needs, business performance, and emerging issues. Timely insights on the challenges business owners face when trying to grow and fund their firms provides critical information for researchers, policymakers, and lenders. 

How does the SBCS support small businesses? 

More responses from small businesses mean more granular data and analyses, allowing the Fed to highlight local-level insights into the experiences of small-business owners and how they are navigating financing and debt needs.  

Local-level insights into the needs of small business owners 

Strong response rates in recent years have enabled the creation of Firms in Focus, a series of chartbooks that presents SBCS data across various business characteristics and owner demographics, as well as by state and metropolitan statistical area (MSA). 

Firms in Focus allows you to compare data for employer firms within a geographic location of interest with data for employer firms across the United States. These findings can inform policymakers, nonprofits, community-based organizations, lenders, and researchers at the state- and MSA-level. 

2023 SBCS findings in the Twelfth District 

In 2023, we received sufficient SBCS responses for state-level results for 4 out of 9 U.S. states and for 2 MSAs with the 12th District. 

How you can help support small businesses and an inclusive, healthy economy

The SBCS is open now through November 1 and takes approximately 10 minutes to complete.  Help us elevate the voices of small businesses in your community by taking the survey today or sharing it with small businesses that you know. 

The views expressed here do not necessarily reflect the views of the management of the Federal Reserve Bank of San Francisco or of the Board of Governors of the Federal Reserve System.

About the Authors
Sarah Simms is a community development finance manager in Community Development at the Federal Reserve Bank of San Francisco. Learn more about Sarah Simms