2024 Report on Payments: Findings from the 2023 Small Business Credit Survey

Summary

Customer payments are the primary source of cash available to small businesses. Based on data from the 2023 Small Business Credit Survey, roughly four of every five small firms face challenges related to these payments.

The difficulties firms encounter tend to differ based on their payment terms and arrangements. For example,

• among firms that collect payment in full at the time of service or purchase, fees are the most common payments-related hurdle.
• for firms that collect payment through a third party, time-consuming payments and delays in settlement or availability of funds are the biggest obstacles.

Businesses’ payments experiences also vary by industry. For instance,

• leisure and hospitality and retail businesses are more likely than those in other industries to accept both card and cash payments and to cite challenges with payments-processing fees.
• professional services and real estate and manufacturing firms are more likely to accept checks as a form of payment and to report that slow-paying customers are a challenge.

Examining the relationships between firms’ payments experiences and challenges can help policymakers better understand and respond to the needs of small businesses.