How Are Small Businesses Doing?

Community Development at the St. Louis Fed gathered dozens of bankers, nonprofit leaders, academics and economic developers on the campus of Mississippi Valley State University to discuss access to banking, credit and capital in the Mississippi Delta. This Aug. 8, 2025, event had a special focus on small businesses, like the Bread and Butter Shoppe, a former restaurant that panelist Valour Taylor had founded to provide more healthy menu options in Greenwood, Miss.

Panelists talk at an Aug. 8, 2025, event, Financial Well-being in the Delta: A Conversation on Banking, Credit and Small Business. From left are: Sydney Diavua, assistant vice president, Federal Reserve Bank of St. Louis; David Johnson, senior vice president and director of Community Development, BankPlus; Cassandra Williams, president, Hope Credit Union; Val Taylor, a small-business founder and administrative assistant for Greenwood-Leflore-Carroll Economic Development Foundation; and Scott Waller, president and CEO, Mississippi Economic Council.

Events like the August conversation in the Delta often stem from insights we find in quantitative data we gather. A key example of this community-informed data is the Small Business Credit Survey, which helps us learn more about how small businesses are doing. This is an annual, national survey conducted in partnership with all 12 Federal Reserve banks.

What Is the Small Business Credit Survey?

The SBCS captures credit conditions for small businesses, and last year, over 13,000The national Small Business Credit Survey opened for responses Sept. 4, 2024, and closed on Nov. 4, 2024. It yielded 7,653 responses from a nationwide convenience sample of small employer firms across all 50 states and the District of Columbia. Small employer firms are those with 1 to 499 full- or part-time employees other than the owner. small businesses from across the country responded. Multiple states received over 100 responses from employer firms, or small businesses that have up to 499 paid employees other than the owner. Among those states are three in the St. Louis Fed’s District: Illinois, Missouri and Tennessee.The St. Louis Fed serves the Eighth Federal Reserve District, which spans all of Arkansas, most of Missouri, and parts of Illinois, Indiana, Kentucky, Mississippi and Tennessee

Partner organizations promote the survey to their networks. If they draw at least 50 responses from employer firms, partners receive individualized reports to evaluate, benchmark and amplify the experiences of businesses they work with. States and metropolitan statistical areas (MSAs) that receive at least 100 responses also have individualized reports generated to capture more localized data insights.

What Does the Survey Say about Small Businesses over the Last Year?

Small businesses reported declines in revenue and employment growth at the highest rate since the 2021 survey findings. For the first time since the 2021 survey, firms were more likely to report that revenues decreased rather than increased in the prior 12 months. So, what’s driving this slightly bleaker outlook for small-business owners? Last year’s respondents signaled that increased costs of goods and wages, staffing issues and increased difficulty growing their sales are the most prevalent issues.

To stay afloat, small businesses most often used personal funds and cash reserves and secured funds that must be repaid through financial products or otherwise. While the majority of respondents applied for financing to meet operating expenses, almost half of those who applied for financing also indicated they intended to expand their businesses.

The SBCS Is Part of a Bigger Picture of Our Economy

At our event in Greenwood, the panelists’ sentiments echoed some of the challenges and successes we see noted in the survey. Panelists said that financial education, creative financing products, technical assistance to lower barriers and stronger relationships with banks could all go a long way in advancing small businesses in their communities. The survey is just one of the many tools we have at our disposal to better understand local economic conditions and build community partnerships.

Notes

1. The national Small Business Credit Survey opened for responses Sept. 4, 2024, and closed on Nov. 4, 2024. It yielded 7,653 responses from a nationwide convenience sample of small employer firms across all 50 states and the District of Columbia. Small employer firms are those with 1 to 499 full- or part-time employees other than the owner.
2. The St. Louis Fed serves the Eighth Federal Reserve District, which spans all of Arkansas, most of Missouri, and parts of Illinois, Indiana, Kentucky, Mississippi and Tennessee.