Key insights from the 2023 Small Business Credit Survey


Cornelius Johnson, Jordan Manes, Lucas Misera, Ann Marie Wiersch

Man and woman looking at laptop screen for work

The Small Business Credit Survey (SBCS) is a collaboration of all 12 Federal Reserve Banks and provides timely information about small business conditions to policymakers and service providers. The 2023 survey was fielded from September through November 2023 and reached more than 6,000 small employer firms, collecting information about the performance, challenges, and credit-seeking experiences of businesses across the United States.

In some respects, the 2023 SBCS findings suggest a further waning of effects from the COVID-19 pandemic and a modest improvement in small-business conditions. Measures of firm performance held steady and remain well above pandemic-era lows, and the share of firms reporting challenges with supply chains declined markedly between 2022 and 2023. Looking forward, firms were much more likely to expect increases than decreases in revenue and employment in the coming year.

Still, small businesses continue to face headwinds. Firms experienced challenges with rising costs and paying operating expenses in the year leading up to the survey. While the share of firms with challenges hiring or retaining qualified staff declined year-over-year, it remained the most common operational challenge. Additionally, a majority of firms said that higher interest rates were affecting their business in some way, most often in the form of increased debt payments.

With respect to financing, the share of firms that applied for loans, lines of credit, or merchant cash advances declined slightly between 2022 and 2023. Approvals remained mostly steady; applicants at small banks, credit unions, and finance companies were more likely than applicants at other sources to be approved for at least some financing. Applicants at small banks and credit unions were most satisfied with their experiences, while online-lender applicants were least satisfied.

Survey findings

The 2023 SBCS yielded 6,131 responses from a nationwide convenience sample of small employer firms with 1–499 full- or part-time employees (hereafter “firms”) across all 50 states and the District of Columbia. This publication summarizes data for firms that were currently operating or temporarily closed at the time of the survey. Permanently closed firms are not included in the sample for this report.

Performance indices held steady year-over-year, but firms faced operational and financial challenges.

  • Performance indices for revenue and employment growth remained steady between 2022 and 2023. While the 2023 performance measures were substantially higher than pandemic-era lows, they remained below prepandemic levels.
  • In the 12 months leading up to the survey, 91% of firms experienced one or more operational challenges, and 93% faced some type of financial challenge.
  • The share of firms experiencing operational challenges associated with the pandemic’s effects continued to decline in 2023. The largest change was in the share of firms that identified supply chain issues as an operational challenge: Forty-one percent reported supply chain issues in 2023, down markedly from 60% in 2022. Additionally, challenges with employee hiring or retention and challenges with ensuring the health and safety of customers or employees declined year-over-year.
  • In both 2022 and 2023, the most commonly reported financial challenge was the rising costs of goods, services, and/or wages. In 2023, 77% of firms identified rising costs as a financial challenge, down from 81% in 2022.

Firms surveyed in 2023 held higher amounts of debt than firms surveyed in the years leading up to the pandemic. 

  • While the share of firms with debt outstanding in 2023 was nearly the same as in 2019, firms with debt are holding higher amounts. Thirty-nine percent of firms had more than $100,000 in debt outstanding at the time of the survey, up from 31% in 2019.
  • Forty-four percent of firms received a US Small Business Administration (SBA) COVID-19 Economic Injury Disaster Loan (EIDL); 28% had an outstanding balance at the time of the survey.[1]
  • Thirty-four percent of firms reported that making payments on debt was a financial challenge. More than half of all firms (54%) said that higher interest rates were contributing to increased debt costs.

Demand for loans, lines of credit, and merchant cash advances declined from 2022 to 2023, and approval rates remained steady year-over-year.

  • Application rates for loans, lines of credit, and merchant cash advances in the 12 months leading up to the survey declined 3 percentage points between 2022 and 2023, falling from 40% to 37%.
  • About half of applicants (51%) were fully approved for the financing for which they applied. While the share of applicants fully approved was higher than the pandemic-era low of 46%, it remained below prepandemic levels.
  • Firms that applied at small banks, credit unions, and finance companies were most likely to be approved. Seventy-five percent of small-bank applicants were at least partially approved, as were 76% of applicants that sought financing at credit unions and finance companies. Comparatively, 70% of online-lender applicants and 66% of large-bank applicants were at least partially approved.
  • Relative to a year earlier, applicant firms were less satisfied with their experiences at their lenders. Satisfaction declined among applicants at large and small banks, finance companies, and online lenders. Across all of these lender categories, the most commonly reported challenge was high interest rates.
About the survey

The SBCS is an annual survey of firms with fewer than 500 employees. These types of firms represent 99.7% of employer establishments in the United States.[2] Respondents are asked to report information about their business performance, financing needs and choices, and borrowing experiences. Responses to the SBCS provide insights into 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.

For detailed information about the survey design and weighting methodology, please consult the Methodology section.

Detailed findings for employer firms are available in the 2024 Report on Employer Firms: Findings from the 2023 Small Business Credit Survey. As findings from the 2023 SBCS are released throughout 2024, you can find the data at


[1] Since the onset of the COVID-19 pandemic, the SBA distributed $390 billion in EIDL loans up to the program’s closure in early 2022. EIDL loans are not forgivable and carry an interest rate of 3.75%. For more on the COVID-19 EIDL program, see the SBA website.

[2] US Census Bureau, County Business Patterns, 2021.