Rural and Urban

The physical location of a small business provides important economic, demographic, and cultural context for understanding the firm’s experiences. About 15 percent of small businesses in the US are located in rural communities, while the remaining 85 percent operate in urban areas (including suburban areas). Small businesses in rural and urban areas share some characteristics but are different in other ways.

The Small Business Credit Survey finds that rural and urban firms often fare similarly on measures of financial performance like revenue growth and profitability. However, the survey finds notable differences in firms’ relationships with the financial system. While urban firms rely on larger banks for financial services, rural businesses are far more likely to rely on small, community banks.