Small businesses are a significant contributor to our economy. Nationally, they employ 45.9% of private-sector workers, and economic activity from small businesses makes up 43.5% of GDP, according to the U.S. Small Business Administration. It’s important for the Federal Reserve System to understand what challenges they face, how and why they access credit, and how current economic conditions affect their business. The External LinkSmall Business Credit Survey (SBCS) helps us do this.
Reserve Banks rely on small-business support organizations to reach this important sector of the economy. The support organizations encourage their clients to take the survey. In return, the organizations can receive data specific to their state or clients. To help spread the word about the SBCS, consider External Linksigning up as a partner.
What we learned from the 2025 Small Business Credit Survey
The SBCS is a collaboration of all 12 Federal Reserve Banks and provides timely information about small-business conditions to policymakers and service providers. The 2025 survey was fielded from September to November 2025 and reached more than 6,500 small employer firms across the United States.
Findings from theExternal Link 2026 Report on Employer Firms include:
- Revenue and employment growth held steady between the 2024 and 2025 surveys. Firms continued to be slightly more likely to report that revenues decreased rather than increased in the prior 12 months. These performance indices have recovered somewhat from their pandemic-era lows but remain below pre-pandemic levels.
- Expectations for both revenue and employment growth in the 12 months following the survey declined to the lowest levels since the 2020 survey. The revenue expectations index fell six points year over year, from 39 to 33, and the employment expectations index fell three points, from 26 to 23.
- Reaching customers and growing sales was the most reported operational challenge, followed by hiring or retaining qualified staff.
- Rising costs of goods, services, and/or wages was the most common financial challenge reported in the prior 12 months. Additionally, more than four in 10 firms reported that increased costs associated with tariffs had been a financial challenge. Seventy-seven percent of firms reported one or both of these challenges. Tariff-related cost challenges were most prevalent in the retail (69%) and manufacturing (62%) industries.
Chartbooks offer a deep dive into various data points
Additionally, the External Link2026 Firms in Focus chartbooks, published in April, provide a deep dive into survey data based on:
- business characteristics: age of firm, credit risk, employment size, industry, revenue size, and urban versus rural firms;
- owner demographics: age, disability status, gender, immigrant status, race/ethnicity, and veteran status; and
- geographic locations: select metropolitan statistical area and state based on response rates.
Partners encourage responses
The SBCS translates small-business owners’ experiences into hard data that informs policy. Partners help us get that data.
The SBCS relies on a partnership model to increase respondents to the survey and improve survey quality. The Federal Reserve Banks collaborate with local and regional organizations that have strong relationships with small-business owners. These partners include local, state, and tribal governments and organizations such as non-bank community development financial institutions, chambers of commerce, economic development entities, and other small-business support organizations. They encourage their networks of small-business contacts to respond to the survey.
Partners can receive a report specific to their organizations
If certain response thresholds are met, the SBCS national team will create geographic-focused chartbooks using the data. These chartbooks provide a local view of the challenges small businesses face and how they respond to those challenges.
In addition, if a partner organization reaches 50 respondents, it receives a “Partner Report.” This report provides comparison data between the firms affiliated with the outreach partner and national respondents. External LinkFed Communities reported recently on two Nebraska agencies that teamed up to drive survey responses, helping to bring small-business voices into policy discussions.
We encourage you to get involved
We welcome existing and new partners to help spread the word about the Small Business Credit Survey. Please help us with that effort by External Linksigning up as a partner.
To learn more, visit External Linkfedsmallbusiness.org or contact Rachael Surmick.
The views expressed are those of the author and do not necessarily reflect the positions of the Federal Reserve Bank of Kansas City or the Federal Reserve System.
Author
