Each year, the Federal Reserve’s Small Business Credit Survey (SBCS) asks small business owners to detail their current business climate, financial needs, and recent credit experiences. Based on this research, the Fed developed the 2019 Report on Employer Firms that provides an in-depth look (PDF) at the business performance and credit outcomes of small businesses.

Highlights of 2019 Federal Reserve’s Small Business Credit Survey

57% | Percentage of small business respondents who reported a strong end to 2018.
57% | Percentage of firms that reported revenue growth.
33% | Percentage of firms that added employees to their payrolls.

Loan applications to online lenders (instead of to traditional banks) continued to trend upward

32% | Percentage of loan applicants who turned to online lenders in 2018 (up from 24% in 2017, 19% in 2016).

Caution Among the Optimistic

The percentage of firms that anticipate adding payroll jobs in 2019 dipped to 38% from 43% in the prior year’s survey.

On the financing front, credit demand held steady in 2018

43% | Percentage of firms seeking external funds for their businesses.
53% | Percentage that experienced a financing shortfall (they obtained less funding than they sought).

Additional survey highlights

35% | Percentage of firms reporting revenue growth and employment growth in 2018. (Comparison: 28% in 2017)

72% | Percentage of firms expressing optimism for revenue growth in 2019 — the same share as in the prior year.

73% | Percentage that reported their input costs (overhead) had increased in the prior 12 months. More than half of these firms raised the prices they charge. Firms that raised their prices were twice as likely to see profitability growth than firms that did not pass on cost increases.

33% | Percentage of firms that added payroll employees in the prior 12 months.

44% | Percentage of firms that expects to hire workers in 2019. (Comparison: 48% in 2018.)

43% | Percentage of firms applying for new capital in 2018 (Comparison: 40% in 2017)

47% | Percentage of borrowers who received the full amount of funding they sought (Of those that did not apply, roughly half reported they had sufficient financing)

Federal Reserve | GettyImages

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