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Press Release

Small-business lending by banks continues to rise as do net job gains for small businesses, but business startups have been comparatively low for years, according to Cleveland Fed analysis

Data suggest an improving landscape for the smallest small businesses, those with 1 to 49 employees. According to analysts at the Federal Reserve Bank of Cleveland, those firms have added in the aggregate more net jobs in recent years than have firms with 50 to 249 employees, and bank lending in amounts of less than $1 million—amounts typically lent to smaller enterprises—continues the year-over-year climb that began in 2013.

But some recent trends are puzzling. Though firm startup rates have recovered from the trough of the Great Recession, there’s been a “rather dramatic decline” in new firms in recent years, according to Mark Schweitzer, the Cleveland Fed’s senior vice president of External Outreach and Regional Analytics. “There’s room to question whether the financial recovery in lending has been enough to support new startups,” says Schweitzer.

Schweitzer expects relatively steady growth for small businesses in the near term. For one, the current regional pressures related to the energy sector should let up over time.

“I think it will generally be an improving picture,” he says. “The better growth environment has been supportive of growth in small businesses as well.”

Read The State of Small Business in Forefront.

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,, 513.455.4479