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Press Release

Cleveland and Richmond Feds release report on microbusinesses based on findings from the 2016 Small Business Credit Survey

Collectively, these small firms account for nearly 35 million jobs

The Federal Reserve Bank of Richmond and the Federal Reserve Bank of Cleveland today issued the fourth in a series of reports that examines the results of an annual survey of small business owners. The Report on Microbusinesses compares the experiences of nonemployer firms consisting of only a business owner, small firms with between one and four employees, and larger companies with less than 500 employees. Nonemployer firms and small firms under four employees are collectively called “microbusinesses.”

The Report found that microbusinesses are less profitable than larger employers and often face more financial challenges. In particular, nonemployers, businesses that employ no one outside the business owner, are just as likely to be operating at a loss as they are a profit. And while 54 percent of larger employers reported facing financial challenges, this was true for 61 percent of nonemployers.

Key findings can be found in the Report on Microbusinesses’ executive summary. Overall, the survey shows:

  • Microbusinesses were less likely to report revenue growth over the last 12 months when compared with larger businesses.
  • Just 30 percent of microbusinesses applied for funding in the 12 months leading up to the survey compared with 50 percent of larger businesses.
  • 72 percent of microbusinesses that applied for financing requested amounts under $100k and although they seek smaller amounts, microbusinesses are more likely to be discouraged about their prospects for approval.
  • Among nonemployers, 73 percent reported being approved for less financing than they needed or no financing at all.
  • Roughly 4 in 5 microbusinesses with financial challenges used personal funds to address their challenges.

Additional reports on the 2016 Small Business Credit Survey that were, or will be, released in 2017 take an in–depth look into other specific types of small businesses, including startups, and women-owned and minority-owned firms.

About the Small Business Credit Survey (Survey)

The Survey collects information about business performance, financing needs and choices and borrowing experiences of firms with 500 or fewer employees. Responses to the Survey provide insight into the dynamics behind aggregate lending trends and about noteworthy segments of small businesses. The results are weighted to reflect the full population of small businesses. The Survey is not a random sample; therefore, results should be analyzed with awareness of potential methodological biases.

The Survey was launched in 2014 through an effort that merged the regional surveys conducted by several Federal Reserve Banks. The 2016 Survey is the first iteration that was conducted on a national scale with involvement from all 12 Federal Reserve Banks and input collected across all 50 states. The 2016 Survey collected 15,991 responses in total, 10,303 of which were from employer firms (firms with at least one employee in addition to the firm owner).

The 2016 Small Business Credit Survey: Report on Microbusinesses is available here. You can access all of the reports from the 2016 Small Business Credit Survey here.

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