Can small business owners access the credit they need?

The takeaway

Small businesses with lower credit risk tend to receive all the financing they seek more often than businesses with higher credit risk, which may be newer, smaller, and more in need of financing.

Small business credit

Fed Small Business is a collection of resources related to, yes, small business. It provides economic research and analysis by the 12 Reserve Banks of the Federal Reserve System as well as the national Small Business Credit Survey (SBCS).

The SBCS asks firms with fewer than 500 employees how much financing their business sought and obtained in the past year. Our FRED graph above shows the share of firms applying for financing that were approved for the full amount they sought. Survey responses are available from 2016 through 2025.

These firms are sorted into three different categories of credit risk: low (solid blue line), medium (dashed green line), and high (dotted orange line).

As you might expect, firms with low credit risk consistently received the full amount of the financing they were seeking more frequently than firms with riskier credit profiles. As Fed Small Business researchers point out, “riskier firms are more often newer and smaller than those with stronger credit scores. As a result, it may be the case that businesses most in need of financing have the most difficulty accessing those funds.”

Small business details

The SBCS offers rich details about the industry, firm size, geographical location, and demographic characteristics of the owners. These data help tell some compelling stories. For example:

• Small rural firms were consistently more likely to receive the full amount of financing compared with their urban counterparts.
• Small firms with annual revenues above $1 million were more likely to receive the full amount of financing compared with firms with revenue below that threshold.
• Small veteran-owned firms are generally at par with small non-veteran-owned firms regarding their full access to the financing requested. But short-lived gaps between these two groups occasionally appear.

Learn more about the demographics of small business owners.

How this graph was created: Browse FRED by release and select “Small Business Credit Survey” and its “Approved for New Financing” release table. Scroll to the section labeled “Credit risk” and check the boxes next to the series labeled “Low credit risk,” “Medium credit risk,” and “High credit risk.” Scroll to the bottom of the page and click “Add to Graph.” Repeat for the other demographics discussed.

Suggested by Krishna Meegada and Diego Mendez-Carbajo.