Small Business Credit Survey: Report on Employer Firms

The Small Business Survey is a collaboration among seven Federal Reserve Banks: Atlanta, Boston, Cleveland, New York, Philadelphia, Richmond, and St. Louis.

The survey reports information about the business performance, financing needs and choices, and borrowing experiences of businesses with fewer than 500 employees.

In 2015, the survey yielded 5,420 responses from businesses in 26 states. Responses from the sample's 3,459 employer firms are featured in this report.

  • Key Findings

    Financing success improved in 2015

    Both firm performance and financing success rates improved year over year. Still, half of applicant firms reported financing shortfalls between the third quarter of 2014 and the third quarter of 2015, meaning they were approved for less than the amount requested. Microbusinesses and startups had the largest unmet financing needs with 63 percent and 58 percent, respectively, reporting a financing shortfall.

    Businesses most satisfied with small bank lending

    Traditional bank lending continues to be the primary source of financing for small businesses. Credit applicants were most successful and most satisfied with their borrowing experience at small banks. Small banks approved at least some of the amount requested for 76 percent of applicants, while large banks approved 58 percent of applicants. Further, small banks earned a satisfaction score (the net percent satisfied with their overall experience) of 75 among approved firms compared to a score of 51 for large banks.

    Online lenders are popular—but they have lowest borrower satisfaction levels

    Overall, 20 percent of employer firms applied at an online lender. (Our questionnaire describes online lenders as nonbank online lenders, including alternative and marketplace lenders.) While the approval rate was relatively high for applicants (71 percent were approved for at least some credit), approved firms were not very satisfied with their experience. The satisfaction score was just 15—far below that of small and large banks. Dissatisfied firms reported concerns with high interest rates and unfavorable repayment terms.

  • Full Report & Data