2022 Report on Employer Firms: Based on the 2021 Small Business Credit Survey

Revised as of May 6, 2022

The Small Business Credit Survey (SBCS), a collaboration of all 12 Federal Reserve Banks, provides timely information about small business conditions to policymakers, service providers, and lenders. In 2021, the survey reached nearly 11,000 employer small businesses, gathering insights about the COVID-19 pandemic’s continuing impact on small businesses, including workforce challenges, business performance, and credit conditions.

The SBCS was fielded during September through November of 2021 and is the second SBCS conducted during the COVID-19 pandemic, thereby offering a view into what has been an uneven economic recovery for small businesses. Many small businesses have not recovered to prepandemic levels, in terms of both revenue and employment, 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. Pandemic-related financial assistance programs, including the Paycheck Protection Program (PPP), were widely used in 2020 and 2021, although the SBCS finds a decline in their use in the 12 months prior to the survey. Personal funds and cash reserves remain an important source of financial stability for small businesses, while financing approval rates continue to decline relative to prepandemic levels. Importantly, the firms most susceptible to the negative effects of the pandemic are also less likely to receive the financing they need.