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2026 Firms in Focus: Chartbook on Firms by Age of Business (Federal Reserve Banks (Small Business Credit Survey))

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PresentationFederal Reserve Banks (Small Business Credit Survey)January 202664 pages96 min readOriginal source
Key number
68%
Younger firms applying for financing p.30
Largest segment
60%
Firms aged 21+ operating at a profit p.7
What changed
56%
Firms aged 0-2 reporting increased revenue p.5

Summary

  • Younger employer firms reported higher rates of revenue growth, with 56% of firms aged 0-2 years seeing increased revenues in the prior 12 months compared to 22% of firms aged 21+ years.p.5
  • Older businesses demonstrated greater profitability, with 60% of firms aged 21+ years operating at a profit at the end of 2024 versus 35% of firms aged 0-2 years.p.7
  • Cost pressures were widespread, with 79% of firms aged 0-2 years and 77% of firms aged 3-5 years citing increased costs of goods, services, and/or wages as a financial challenge.p.13
  • To handle financial challenges, 67% of firms aged 0-2 years used personal funds, compared to 39% of firms aged 21+ years.p.14
  • Financing application rates were highest among younger businesses, with 68% of firms aged 0-2 years applying for financing in the prior 12 months.p.30
  • Financing approval rates favored older firms, as 63% of applicants aged 21+ years were approved compared to 27% of applicants aged 0-2 years.p.38
  • Adoption of artificial intelligence was higher in younger firms, with 52% of firms aged 0-2 years currently using AI at the time of the survey.p.42

Key insights

  1. 80% of employer firms aged 0-2 years expect their revenue to increase in the next 12 months.p.8
  2. Reaching customers or growing sales was the top operational challenge for 51% of 0-2 year old firms.p.12
  3. 57% of employer firms aged 21+ years sourced no inputs from outside the United States in 2024.p.16
  4. 33% of employer firms aged 0-2 years had no outstanding debt at the time of the survey.p.23
  5. 69% of employer firms aged 21+ years regularly use credit cards for financing and credit.p.25
  6. Large banks were applied to by 45% of loan, line of credit, or MCA applicants aged 21+ years.p.37
  7. 29% of 0-2 year old employer firms received funding from owner(s) in the prior 12 months.p.40
  8. 89% of AI-using employer firms aged 0-2 years utilize AI for writing or marketing tasks.p.45

Topics and entities

USAI in financeBankingPrivate debt and venture debtSME finance and lendingStartup fundingFederal Reserve BanksSmall Business AdministrationUS Census Bureau

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