The Small Business Credit Survey 2022 Report on Employer Firms reveals small business owners are still struggling to get back their pre-pandemic levels of revenue. For close to two-thirds or 63% of small businesses, their revenue is still lower than in 2019.
Small Business Owners Struggle to Reach Pre-Pandemic Revenue
The Small Business Credit Survey (SBCS) reports on experiences of 10,914 businesses across all 50 states and the District of Columbia. The survey is a collaboration of all 12 Federal Reserve Banks with the goal of showing a more accurate picture of small businesses in the country.
The report for this year’s survey reveals the impact of the pandemic is still significant and ongoing. More than three fourth or 77% report negative effects. And this is resulting in 59% of businesses reporting they are in fair or poor financial condition.
The Fed Said, “Many small businesses have not recovered to pre-pandemic levels, with the effects of the pandemic hitting disproportionately hard among firms in the leisure and hospitality sector, smaller firms, and firms owned by people of color.”
Overall, the top operational challenges facing these businesses are hiring or retaining qualified staff and navigating supply-chain issues. For most of the owners, this means finding help to deal with their financial shortcomings. Sixty-six percent received pandemic-related financial assistance, which is lower than the 87% of 2020.
The Economic Injury Disaster Loan program and the Paycheck Protection Program (PPP) were the programs of choice with 48% and 47% of businesses applying respectively. Of these applicants, those receiving the full amount of PPP funding they applied for was down year over year, from 76% in 2020 to 67% in 2021.
On the topic of funding and credit, those who applied and received traditional funding fell from 51% in 2019 to 36% in 2020 to 30% in 2021. For the most part, businesses were looking for financing to address their operating expenses instead of expanding their business.
Federal Reserve Survey
The Small Business Credit Survey (SBCS) is a collaboration of all 12 Federal Reserve Banks. It provides policymakers, service providers, and lenders timely information about small business conditions.
The survey was carried out from September through November of 2021, the second SBCS conducted during the COVID-19 pandemic. The survey looks to find out the continuing COVID-19 impact on small businesses, including workforce challenges, business performance, and credit conditions.
The data offers valuable insight into the uneven economic recovery small businesses have been experiencing.