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

Summary

How do the financial conditions and credit needs of young firms compare to those of older ones? How do they compare among employer and nonemployer firms? To help answer these questions, this report presents some key findings from the 2023 Small Business Credit Survey:

• More than half of startup firms are operating at a loss. While these businesses are not yet profitable, they are much more likely than their older counterparts to report revenue growth in the prior 12 months and are more likely to expect revenue growth in the next 12 months.
• Startup nonemployer firms are less likely than other firms to have financial services relationships and are less likely to regularly use financing and credit products. However, startup employer firms are far more likely than other firms to have sought financing in the prior 12 months.
• Among firms that applied for financing, startup employers were less likely than older employers to be fully approved, and nonemployer firms were less likely to be approved than employer firms.
• Both nonemployer and employer startup firms were more likely than older firms to have received funds from their owners.

Analyzing the differences between firms at different phases of their lifecycles can shed light on how to best support their growth, bolstering the broader economy.