NEW YORK –The Federal Reserve Bank of New York today released its Regional Perspectives on Puerto Rico Small Business Report (Regional Perspectives Report), which is a new look at the aggregate data presented in its inaugural Puerto Rico Small Business Survey Report (Inaugural Report) released in November 2016. Both the Inaugural and Regional Perspectives Reports focus on the business performance, financing needs and borrowing experiences of small firms across the Island. Both reports were designed by the New York Fed with input from partners in Puerto Rico, and are modeled after the U.S. mainland Small Business Credit Survey.
The Regional Perspectives Report is unique because it segments the overall survey data into two areas broadly constructed by geographical proximity—the Puerto Rico North Central Metro area (PR-NCM) and the rest of Puerto Rico– to compare the demographics and financing experiences of small businesses in different areas of Puerto Rico. This report contributes to the New York Fed’s ongoing efforts to understand U.S. small businesses and inform actions to strengthen the economy in Puerto Rico.
The Regional Perspectives Report’s key findings are in its “Highlights” section. These include:
- Demographics: The majority of firms in both geographic areas have few employees and annual revenues under $250,000, yet PR-NCM firms are generally older and less profitable.
- Credit Demand and Outcomes: Both regions had similar credit application rates and reasons for applying, but PR-NCM firms tended to request higher funding amounts and were less likely to be approved for funding.
- Partial Funding Shortfalls: PR-NCM firms that were partially funded primarily cited insufficient collateral as the reason, while firms in the rest of Puerto Rico pointed to their type of industry, insufficient credit history and low credit scores as obstacles. Many firms in both regions responded to credit shortfalls by using personal resources.
- Zero Funding Responses: Many PR-NCM firms that were denied credit decided to delay or pass on business opportunities, while firms in the rest of Puerto Rico were generally split between this tactic and turning to personal resources.
- Training and Growth Needs: These needs were similar for firms in both geographic regions—specifically citing the need for training focused on increasing sales and improved access to capital and credit.
About the Puerto Rico Small Business Survey
The Puerto Rico Small Business Survey was issued as a pilot in 2016 and collects information about small businesses, defined as firms with fewer than 500 employees. The results released today come from a survey conducted throughout early 2016 that analyzed responses from over 750 small businesses in Puerto Rico. The questions address three major topic areas: firm demographics and performance; demand for credit and outcomes; and top ranked training and business growth needs. A broad network of Puerto Rico business and community organizations partnered with the New York Fed to design and implement the survey—these partners include the organizations listed here.