Small Business Credit Survey: A Q&A With Claire Kramer Mills

Claire Kramer Mills, assistant vice president and chief architect of the survey, discusses the Small Business Credit Survey and its latest findings.

How is the Small Business Credit Survey unique?

The survey provides a current and detailed look at the credit needs and experiences of businesses in the Northeast, Southeast, Midwest and Rocky Mountain regions of the country. The survey is also noteworthy in collecting a relatively large sample of young businesses; approximately 35 percent of survey respondents own businesses that have been operating for less than five years. Young firms are particularly important because this segment is vital for job growth and there are very limited data available on young firms. The survey also asks questions about new and emerging credit types and providers, including online lenders, which have grown considerably since the Great Recession.

Who are the survey participants and where are they from? How large is the population?

The Small Business Credit Survey currently captures the perspectives of businesses with fewer than 50 employees in 26 states. The 2016 Report on Employer Firms, based on data collected in 2015, presents findings from almost 3500 firms, and contains detailed analysis of microbusinesses, startups and growing firms.

What did you find this year?

The 2015 survey report presents a largely optimistic picture for small firms in the United States. More than half of the employer firms in our sample reported that their revenues are increasing and that they are operating profitably. The results indicate that 47 percent of the respondents applied for financing and, of these, about half were approved for the all credit they were seeking.

The report also highlights financing gaps. Shortfalls were more prevalent among smaller and newer firms. In addition, the results show that small banks were the most common source of credit, and that business owners are more satisfied with small bank lenders than large bank or online sources of financing.

What findings were most surprising to you?

The prevalent use of personal assets to secure financing for business purposes is striking. It’s common across firm sizes and maturity levels, even among the largest and oldest firms in the sample. The implication is that personal financial well-being and asset-building is critically tied to business financing at all stages of the business life cycle.