Fed survey: Small business pandemic recovery hits plateau

For the first time since 2021, small businesses reporting a drop in revenue outnumbered those reporting an increase, according to the 2025 Report on Employer Firms: Findings from the 2024 Small Business Credit Survey, released today by the 12 Federal Reserve Banks.

Employment growth and other metrics mostly held steady but remained well below prepandemic levels.

The national survey suggests that small businesses are still struggling with some postpandemic challenges, such as rising costs and debt levels. But they’re feeling some relief from others, like supply chain and staffing issues.

More insights:

• Challenges: Reaching customers and growing sales replaced staffing issues as the top operational challenge. Only 29% reported issues with supply chains, down from 60% in 2022. Rising costs by far remained the top financial challenge.
• Future expectations: As usual, small businesses expecting to grow in the coming year greatly outnumbered those expecting to contract. Still, they were less optimistic than they were before the pandemic.
• Debt: 39% of firms reported having more than $100,000 in debt, up from 31% in 2019. More firms said they were denied financing because of elevated debt (41% in 2024 versus 22% in 2021).
• Demand for financing: The application rate at large banks fell by 5 percentage points year over year but remained fairly stable for other lenders.
• Approval rates: The portion of applicants receiving all the financing they sought continued to hover below prepandemic levels. As usual, firms were most likely to be fully approved at small banks (54%) and least likely at online lenders (30%). The rate for large banks was 45%.
• Satisfaction: Across all lender categories, satisfaction rates fell, in some cases significantly. For online lenders, net satisfaction fell to 2% from 15% year over year. Their applicants cited high interest rates and unfavorable repayment terms as the most common challenges.

The survey yielded 7,653 responses from US companies with at least one employee but fewer than 500. It was conducted from September 4 to November 4, 2024.

Get the report – and the Excel data: 2025 Report on Employer Firms: Findings from the 2024 Small Business Credit Survey

Further reading: From Short-Term Relief to Long-Term Hardship: Some Small Businesses Struggle with Debt Burdens from COVID-19 Economic Injury Disaster Loans

About the Small Business Credit Survey

The SBCS is an annual survey of US companies with fewer than 500 employees. These types of firms represent 99.7% of all employer establishments in the United States. Respondents are asked to report information about their business performance, financing needs and choices, and borrowing experiences. Responses to the SBCS provide insights on the dynamics behind lending trends and shed light on various segments of the small business population. The SBCS is not a random sample; results should be analyzed with awareness of potential biases that are associated with convenience samples.

Media contact

Chuck Soder, chuck.soder@clev.frb.org, 216.672.2798