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2015 Nonemployer Firms Credit Survey

2015 Small Business Credit Survey: Report on Nonemployer Firms

Federal Reserve Banks of Atlanta, Boston, Cleveland, New York, Philadelphia, Richmond, and St. Louis.

First published December 2016

Small nonemployer businesses—those with no employees other than the firms’ owners—make up nearly 80% of all U.S. firms in number. Yet, little is known about the performance or the financing needs and decisions of these 23 million businesses. The few sources that provide insight into small business credit conditions do not distinguish the experiences of nonemployers from small employer firms, which may differ significantly.

The 2015 Small Business Credit Survey (SBCS) helps to address these gaps. The survey collected 1,576 responses from nonemployer firms. These responses shed light on the experiences of these small business entities, including firm performance and financing outcomes.

The SBCS was first launched in 2014 through an effort that merged the regional surveys conducted by several Federal Reserve Banks. The survey expanded its geographic coverage in 2015 to include 26 states. The 2015 survey yielded 5,420 responses. The report on employer firms, which was released earlier this year, found the net share of firms reporting profitability, revenue growth, and employment growth all increased from the 2014 survey. Moreover, half of the applicants reported receiving all of the financing they applied for in 2015.

This report highlights the results for the nonemployer respondents. The survey results illustrate some of the unique characteristics and challenges that set nonemployer businesses apart from employer firms. While these firms, by definition, have no employees, nearly a third use contract workers. The survey results show that profitability is often a challenge for nonemployers, particularly the smaller firms. Finally, just 32% of firms applied for financing in the prior year, and among applicants, the majority reported difficulties obtaining all or even some of the funding they sought.

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