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Press Release

Regional Federal Reserve Banks Find Firms Seeking Small Amounts of Credit and Borrowing for Expansion

The Federal Reserve Banks of New York, Atlanta, Cleveland and Philadelphia today jointly released findings from their Small Business Credit Survey. The survey found significant differences in credit demand across firm size segments during the first half of 2014. The report also highlighted the difficulty many small businesses have accessing credit. 

The survey provides information on the business conditions and financing needs of small businesses from a 10 state coverage area, and gives state-level data for Georgia, New York, Ohio and Pennsylvania.

Key findings include:

There are wide differences in credit demand between small and larger revenue firms

  • While 22 percent of firms overall reported applying for credit in the first half of 2014, there was considerably weaker demand among firms with less than $1 million in annual revenues than those with larger revenues.
  • Only 18 percent of microbusinesses (those under $250,000 in revenue) applied for credit. By contrast, over 30 percent of small ($250,000-$1 million) and mid-sized firms ($1-$10 million) and 58 percent of commercial firms (greater than $10 million) sought credit.

Firms are looking for small amounts of credit (under $100k) and are borrowing for expansion

  • Over half of the credit applicants sought $100,000 or less .
  • Almost 40 percent of those seeking credit said the primary purpose was to expand their business.
  • Most credit applicants were experienced borrowers and growing.
  • A third of firms report that financing costs have increased over the past 12 months.

Large banks are the dominant source for credit but online lending is sizeable

  • Small firms primarily turn to large national and regional banks for financing, but almost 1 in 5 applicants applied to an online lender in the first half of 2014.
  • Approval rates were highest at large and small regional banks and online lenders. Of firms that applied to a small regional or community bank, 60 percent were approved for at least some of the financing sought.

About the Small Business Credit Survey
Established in 2010 by the New York Fed, the Small Business Credit Survey (SBCS) is a survey of firms reporting information about business performance, financing needs and choices, and borrowing experiences. Responses to the SBCS provide insight into the dynamics behind aggregate lending trends and shed light on noteworthy segments of the small business credit market (as reported by firms). The SBCS captures the perspectives of businesses with fewer than 500 employees and results are weighted to reflect the full population of small businesses. This year, in coordination with the Reserve Banks of Atlanta, Cleveland and Philadelphia, the survey includes ten states of coverage: Alabama, Connecticut, Florida, Georgia, Louisiana, New Jersey, New York, Ohio, Pennsylvania and Tennessee.

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell,, 513.218.1892