Nonemployer firms are less likely to be profitable than their employer firm counterparts, and they face more substantial challenges accessing credit.
Firms in Focus is a series of chartbooks presenting Small Business Credit Survey data across various business and owner demographic characteristics, as well as by state and metropolitan statistical area (MSA).
Small business revenue, employment, and profitability each improved from 2021, but expectations worsened year-over-year. With the end of pandemic-related funding programs, the application rate for traditional financing rebounded to prepandemic levels.
The 2021 Small Business Credit Survey (SBCS) found that 1 in 10 small employer businesses suffered losses from a natural disaster during the prior 12 months.
Most businesses with no employees other than the owner earned lower revenues in 2021 than they did before the pandemic. These nonemployer firms continued to be less likely than employer firms to seek pandemic-related financial assistance.
Seventy-five percent of employer firms tried to hire workers in 2021; close to half called the experience “very difficult.” In response, firms most often increased wages or shifted more work to existing employees.
Businesses owned by people of color faced more financial and operational challenges than their white-owned counterparts and often were less successful at obtaining the funding needed to weather the effects of the pandemic.
