2024 Report on Employer Firms: Findings from the 2023 Small Business Credit Survey
United States Federal Reserve
First published March 2024
While firm revenue and employment growth held mostly steady year-over-year, most firms—more than 9 in 10—experienced either a financial or operational challenge in 2023. With respect to financing, the share of firms that applied for loans, lines of credit, or merchant cash advances declined year over year, though approvals remained little changed.
The 2023 Small Business Credit Survey (SBCS) shows signs of a further waning of the effects of the COVID-19 pandemic on firms, as challenges closely associated with the pandemic—like supply chain issues—eased between 2022 and 2023. Measures of firm performance remained elevated well above pandemic-era lows and remained steady year-over-year but lagged prepandemic levels.
Small businesses continued to face operational and financial headwinds. Firms experienced challenges with rising costs and paying operating expenses in the year leading up to the survey, which was fielded from September to November of 2023. And, while the share of firms reporting challenges with hiring or retaining qualified staff declined between 2022 and 2023, it remained the most common operational challenge.
With respect to financing, the share of firms that applied for loans, lines of credit, or merchant cash advances declined slightly between 2022 and 2023. Approvals remained mostly steady; applicants at small banks, credit unions, and finance companies were more likely to be approved for at least some financing than applicants at other sources. Applicants at small banks and credit unions were most satisfied with their experiences, while online-lender applicants were least satisfied.
Along with details on firm performance and financing, this report includes findings related to a series of special questions on payments, COVID-19 Economic Injury Disaster Loan debt, and businesses’ relationships with financial services providers.